10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                 to                .

COMMISSION FILE NUMBER: 000-26076

SINCLAIR BROADCAST GROUP, INC.

(Exact name of Registrant as specified in its charter)

Maryland	52-1494660
(State or other jurisdiction of Incorporation or organization)	(I.R.S. Employer Identification No.)

10706 Beaver Dam Road
Hunt Valley, Maryland 21030

(Address of principal executive office, zip code)

(410) 568-1500

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such file).  Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer o	Accelerated filer x
Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o No x

Indicate the number of share outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

Title of each class	Number of shares outstanding as of November 1st, 2013
Class A Common Stock	73,912,097
Class B Common Stock	26,262,210

SINCLAIR BROADCAST GROUP, INC.

FORM 10-Q

FOR THE QUARTER ENDED September 30, 2013

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		3
ITEM 1.	FINANCIAL STATEMENTS	3
	CONSOLIDATED BALANCE SHEETS	3
	CONSOLIDATED STATEMENTS OF OPERATIONS	4
	CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	5
	CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)	6
	CONSOLIDATED STATEMENTS OF CASH FLOWS	8
	NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	9
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	36
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
ITEM 4.	CONTROLS AND PROCEDURES	46
PART II.	OTHER INFORMATION	47
ITEM 1.	LEGAL PROCEEDINGS	47
ITEM 1A.	RISK FACTORS	47
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	47
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	47
ITEM 4.	MINE SAFETY DISCLOSURES	47
ITEM 5.	OTHER INFORMATION	47
ITEM 6.	EXHIBITS	48
SIGNATURE		49
EXHIBIT INDEX		50

PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data) (Unaudited)

	As of September 30, 2013			As of December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	228,994		$	22,865
Accounts receivable, net of allowance for doubtful accounts of $3,068 and $3,091, respectively	250,054			183,480
Affiliate receivable	—			416
Current portion of program contract costs	82,583			56,581
Prepaid expenses and other current assets	14,780			7,404
Deferred barter costs	5,271			3,345
Assets held for sale	5,900			30,357
Total current assets	587,582			304,448
PROGRAM CONTRACT COSTS, less current portion	30,249			12,767
PROPERTY AND EQUIPMENT, net	513,382			439,713
RESTRICTED CASH	41,257			225
GOODWILL	1,297,638			1,074,032
BROADCAST LICENSES	98,210			85,122
DEFINITE-LIVED INTANGIBLE ASSETS, net	819,678			623,406
OTHER ASSETS	229,677			189,984
Total assets (a)	$	3,617,673		$	2,729,697
LIABILITIES AND EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	14,412		$	10,086
Accrued liabilities	200,779			143,731
Income taxes payable	1,686			9,939
Current portion of notes payable, capital leases and commercial bank financing	16,622			47,622
Current portion of notes and capital leases payable to affiliates	2,271			1,704
Current portion of program contracts payable	99,900			88,015
Deferred barter revenues	5,005			3,499
Deferred tax liabilities	36			607
Liabilities held for sale	—			2,397
Total current liabilities	340,711			307,600
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	2,436,386			2,210,866
Notes payable and capital leases to affiliates, less current portion	19,619			13,187
Program contracts payable, less current portion	38,054			16,341
Deferred tax liabilities	302,914			233,465
Other long-term liabilities	63,751			48,291
Total liabilities (a)	3,201,435			2,829,750
COMMITMENTS AND CONTINGENCIES (See Note 3)
EQUITY (DEFICIT):
SINCLAIR BROADCAST GROUP SHAREHOLDERS’ EQUITY (DEFICIT):
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 73,900,442 and 52,332,012 shares issued and outstanding, respectively	739			523
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 26,262,210 and 28,933,859 shares issued and outstanding, respectively, convertible into Class A Common Stock	263			289
Additional paid-in capital	1,097,098			600,928
Accumulated deficit	(684,470		)	(713,697		)
Accumulated other comprehensive loss	(5,109		)	(4,993		)
Total Sinclair Broadcast Group shareholders’ equity (deficit)	408,521			(116,950		)
Noncontrolling interests	7,717			16,897
Total equity (deficit)	416,238			(100,053		)
Total liabilities and equity (deficit)	$	3,617,673		$	2,729,697

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a)Our consolidated total assets as of September 30, 2013 and December 31, 2012 include total assets of variable interest entities (VIEs) of $148.9 million and $107.9 million, respectively, which can only be used to settle the obligations of the VIEs.  Our consolidated total liabilities as of September 30, 2013 and December 31, 2012 include total liabilities of the VIEs of $16.4 million and $7.9 million, respectively, for which the creditors of the VIEs have no recourse to us.  See Note 1. Summary of Significant Accounting Policies.

3

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
REVENUES:
Station broadcast revenues, net of agency commissions	$	303,028		$	225,023		$	835,223		$	633,493
Revenues realized from station barter arrangements	20,653			21,179			60,930			60,060
Other operating divisions revenues	14,963			12,512			39,263			38,609
Total revenues	338,644			258,714			935,416			732,162
OPERATING EXPENSES:
Station production expenses	98,939			61,705			265,066			184,098
Station selling, general and administrative expenses	66,115			43,169			171,350			120,462
Expenses recognized from station barter arrangements	18,082			19,300			53,478			55,119
Amortization of program contract costs and net realizable value adjustments	19,229			14,296			56,746			43,565
Other operating divisions expenses	12,746			10,372			33,351			33,165
Depreciation of property and equipment	17,408			12,626			47,108			34,031
Corporate general and administrative expenses	16,109			8,286			38,806			25,166
Amortization of definite-lived intangible and other assets	17,168			10,562			48,727			26,375
Total operating expenses	265,796			180,316			714,632			521,981
Operating income	72,848			78,398			220,784			210,181
OTHER INCOME (EXPENSE):
Interest expense and amortization of debt discount and deferred financing costs	(39,867		)	(35,294		)	(123,029		)	(92,001		)
Loss from extinguishment of debt	—			—			(16,283		)	(335		)
Income from equity and cost method investments	1,571			1,919			115			8,343
Other income, net	488			547			1,427			1,733
Total other expense	(37,808		)	(32,828		)	(137,770		)	(82,260		)
Income from continuing operations before income taxes	35,040			45,570			83,014			127,921
INCOME TAX PROVISION	(4,489		)	(19,093		)	(22,992		)	(42,185		)
Income from continuing operations	30,551			26,477			60,022			85,736
DISCONTINUED OPERATIONS:
Income (loss) from discontinued operations, includes income tax benefit (provision) of $6,107, $(36), $10,806 and $(220), respectively	6,100			(125		)	11,558			(178		)
NET INCOME	36,651			26,352			71,580			85,558
Net (income) loss attributable to the noncontrolling interests	(309		)	(107		)	(415		)	106
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	$	36,342		$	26,245		$	71,165		$	85,664
Dividends declared per share	$	0.15		$	0.15		$	0.45		$	0.39
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic earnings per share from continuing operations	$	0.30		$	0.33		$	0.66		$	1.06
Basic earnings per share from discontinued operations	$	0.06		$	(0.00	)	$	0.13		$	(0.00	)
Basic earnings per share	$	0.37		$	0.33		$	0.78		$	1.06
Diluted earnings per share from continuing operations	$	0.30		$	0.33		$	0.65		$	1.06
Diluted earnings per share from discontinued operations	$	0.06		$	(0.00	)	$	0.13		$	(0.00	)
Diluted earnings per share	$	0.36		$	0.32		$	0.78		$	1.05
Weighted average common shares outstanding	99,473			81,081			90,982			80,990
Weighted average common and common equivalent shares outstanding	100,239			81,379			91,549			81,267
AMOUNTS ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP COMMON SHAREHOLDERS:
Income from continuing operations, net of tax	$	30,242		$	26,370		$	59,607		$	85,842
Income (loss) from discontinued operations, net of tax	6,100			(125		)	11,558			(178		)
Net income	$	36,342		$	26,245		$	71,165		$	85,664

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands) (Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2013			2012			2013			2012
Net income	$	36,651		$	26,352		$	71,580		$	85,558
Amortization of net periodic pension benefit costs, net of taxes	(38		)	57			(116		)	246
Comprehensive income	36,613			26,409			71,464			85,804
Comprehensive (income) loss attributable to the noncontrolling interests	(309		)	(107		)	(415		)	106
Comprehensive income attributable to Sinclair Broadcast Group	$	36,304		$	26,302		$	71,049		$	85,910

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)

(In thousands) (Unaudited)

	Sinclair Broadcast Group Shareholders
	Class A Common Stock			Class B Common Stock			Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Noncontrolling			Total Equity
	Shares	Values		Shares	Values		Capital		Deficit			Loss			Interests			(Deficit)
BALANCE, December 31, 2011	52,022,086	$	520	28,933,859	$	289	$	617,375	$	(734,511	)	$	(4,848	)	$	9,813		$	(111,362	)
Dividends declared on Class A and Class B Common Stock	—	—		—	—		—		(31,245		)	—			—			(31,245		)
Class A Common Stock issued pursuant to employee benefit plans	284,722	3		—	—		4,551		—			—			—			4,554
Tax benefit on share based awards	—	—		—	—		207		—			—			—			207
Distributions to noncontrolling interests		—		—	—		—		—			—			(734		)	(734		)
Issuance of subsidiary share awards	—	—		—	—		—		—			—			392			392
Amortization of net periodic pension benefit costs, net of taxes	—	—		—	—		—		—			246			—			246
Net income	—	—		—	—		—		85,664			—			(106		)	85,558
BALANCE, September 30, 2012	52,306,808	$	523	28,933,859	$	289	$	622,133	$	(680,092	)	$	(4,602	)	$	9,365		$	(52,384	)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENT OF EQUITY (DEFICIT)

(In thousands) (Unaudited)

	Sinclair Broadcast Group Shareholders
	Class A Common Stock			Class B Common Stock					Additional Paid-In		Accumulated			Accumulated Other Comprehensive			Noncontrolling			Total Equity
	Shares	Values		Shares		Values			Capital		Deficit			Loss			Interests			(Deficit)
BALANCE, December 31, 2012	52,332,012	$	523	28,933,859		$	289		$	600,928	$	(713,697	)	$	(4,993	)	$	16,897		$	(100,053	)
Dividends declared on Class A and Class B Common Stock	—	—		—		—			—		(41,938		)	—			—			(41,938		)
Issuance of common stock, net of issuance costs	18,000,000	180		—		—			472,220		—			—			—			472,400
Class B Common Stock converted into Class A Common Stock	2,671,649	27		(2,671,649	)	(27		)	—		—			—			—			—
4.875% Convertible Debentures converted into Class A Common Stock, net of taxes	338,632	3		—		—			7,310		—			—			—			7,313
Class A Common Stock issued pursuant to employee benefit plans	558,149	6		—		—			9,129		—			—			344			9,479
Tax benefit on share based awards	—	—		—		—			503		—			—			—			503
Distributions to noncontrolling interests	—	—		—		—			—		—			—			(9,939		)	(9,939		)
Class A Common Stock sold by variable interest entity, net of taxes	—	—		—		—			7,008		—			—			—			7,008
Amortization of net periodic pension benefit costs, net of taxes	—	—		—		—			—		—			(116		)	—			(116		)
Net income	—	—		—		—			—		71,165			—			415			71,580
BALANCE, September 30, 2013	73,900,442	$	739	26,262,210		$	263		$	1,097,098	$	(684,470	)	$	(5,109	)	$	7,717		$	416,238

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

SINCLAIR BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Nine Months Ended September 30,
	2013			2012
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$	71,580		$	85,558
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of property and equipment	47,108			35,527
Amortization of definite-lived intangible and other assets	48,727			26,877
Amortization of program contract costs and net realizable value adjustments	56,746			44,247
Loss on extinguishment of debt	16,283			335
Deferred tax (benefit)	(1,486		)	(523		)
Change in assets and liabilities, net of acquisitions:
(Increase) decrease in accounts receivable, net	(37,359		)	9,801
Increase in prepaid expenses and other current assets	(3,925		)	(11,375		)
Increase in other assets	(4,312		)	(20,354		)
(Decrease) increase in accounts payable and accrued liabilities	28,024			21,637
(Decrease) increase in income taxes payable	(1,182		)	6,953
Increase in other long-term liabilities	(2,282		)	2,657
Payments on program contracts payable	(67,407		)	(52,312		)
Original debt issuance discount paid	(10,285		)	—
Other, net	10,409			14,276
Net cash flows from operating activities	150,639			163,304
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(28,776		)	(30,157		)
Payments for acquisition of television stations	(495,440		)	(590,917		)
Payments for acquisitions in other operating divisions	(4,650		)	—
Purchase of alarm monitoring contracts	(11,928		)	(7,343		)
Proceeds from sale of broadcast assets	27,992			—
(Increase) decrease in restricted cash	(41,032		)	15,849
Distributions from equity and cost method investees	4,321			9,514
Investments in equity and cost method investees	(10,205		)	(6,176		)
Other, net	2,976			(33		)
Net cash flows used in investing activities	(556,742		)	(609,263		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	1,198,815			615,707
Repayments of notes payable, commercial bank financing and capital leases	(998,085		)	(95,845		)
Proceeds from the sale of Class A Common Stock	472,400			—
Proceeds from exercise of stock options, including excess tax benefits of share based payments of $0.5 million and $0.2 million, respectively	1,688			327
Dividends paid on Class A and Class B Common Stock	(41,938		)	(31,245		)
Payments for deferred financing costs	(20,205		)	(8,364		)
Proceeds from Class A Common Stock sold by variable interest entity	10,908			—
Noncontrolling interests distributions	(9,939		)	(734		)
Repayments of notes and capital leases to affiliates	(1,412		)	(2,229		)
Net cash flows from (used in) financing activities	612,232			477,617
NET INCREASE IN CASH AND CASH EQUIVALENTS	206,129			31,658
CASH AND CASH EQUIVALENTS, beginning of period	22,865			12,967
CASH AND CASH EQUIVALENTS, end of period	$	228,994		$	44,625

The accompanying notes are an integral part of these unaudited consolidated financial statements.

8

SINCLAIR BROADCAST GROUP, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and VIEs for which we are the primary beneficiary.  Noncontrolling interests represents a minority owner’s proportionate share of the equity in certain of our consolidated entities.  All intercompany transactions and account balances have been eliminated in consolidation.

Discontinued Operations

In accordance with Financial Accounting Standards Board’s (FASB) guidance on reporting assets held for sale, we reported the financial position and results of operations of our stations in Lansing, Michigan (WLAJ-TV) and Providence, Rhode Island (WLWC-TV), as assets and liabilities held for sale in the accompanying consolidated balance sheets and discontinued operations consolidated statements of operations.  Discontinued operations have not been segregated in the consolidated statements of cash flows and, therefore, amounts for certain captions will not agree with the accompanying consolidated balance sheets and consolidated statements of operations. WLAJ-TV was acquired in the second quarter of 2012 in connection with the acquisition of the television stations from Freedom Communications (Freedom). WLWC-TV was acquired in the first quarter of 2012 in connection with the acquisition of the television stations from Four Points Media Group LLC (Four Points). See Note 2. Acquisitions for more information.  In October 2012, we entered into an agreement to sell all the assets of WLAJ-TV to an unrelated third party for $14.4 million.  In January 2013, we entered into an agreement to sell the assets of WLWC-TV to an unrelated third party for $13.8 million.  The operating results of WLAJ-TV, which was sold effective March 1, 2013, and WLWC-TV, which was sold effective April 1, 2013, are not included in our consolidated results of operations from continuing operations for the three and nine months ending September 30, 2013 and 2012. Total revenues for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, were $0.6 million and $1.6 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the three months ending September 30, 2012, are $1.1 million and $1.8 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are $2.2 million and $4.7 million, respectively.  Total income before taxes for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, are $0.2 million and $0.4 million, respectively, and total income(loss) before taxes of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are less than $(0.1) million and $0.1 million, respectively.  The resulting gain on the sale of these stations in 2013 was negligible.

Additionally, we recognized a $6.1 and $11.2 million income tax benefit for the three and nine months ended September 30, 2013, respectively, attributable to the adjustment of certain liabilities for unrecognized tax benefits related to discontinued operations. See discussion under Income Taxes below.

Interim Financial Statements

The consolidated financial statements for the three and nine months ended September 30, 2013 and 2012 are unaudited.  In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statement of equity (deficit) and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (SEC), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.  The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

Variable Interest Entities

In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE.  We consolidate VIEs when

9

we are the primary beneficiary.  The assets of each of our consolidated VIEs can only be used to settle the obligations of the VIE. All the liabilities, including debt held by our VIEs, are non-recourse to us except for Cunningham Broadcasting Company’s (Cunningham) and Deerfield Media, Inc.’s (Deerfield) debt which we guarantee.

We have entered into local marketing agreements (LMAs) to provide programming, sales and managerial services for television stations of Cunningham, the license owner of seven television stations as of September 30, 2013.  We pay LMA fees to Cunningham and also reimburse all operating expenses.  We also have an acquisition agreement in which we have a purchase option to buy the license assets of the television stations which includes the Federal Communication Commission (FCC) license and certain other assets used to operate the station (License Assets).  Our applications to acquire the FCC licenses are pending approval.  We own the majority of the non-license assets of the Cunningham stations and our Bank Credit Agreement contains certain default provisions whereby insolvency of Cunningham would cause an event of default under our Bank Credit Agreement.  We have determined that the Cunningham stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and the cross-default provisions with our Bank Credit Agreement, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Cunningham.  See Note 6. Related Person Transactions for more information on our arrangements with Cunningham.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $25.9 million and $25.5 million, respectively, that relate to LMAs with Cunningham.  For the nine months ended September 30, 2013 and 2012, Cunningham’s stations provided us with approximately $80.3 million and $73.5 million, respectively, of net broadcast revenues.

We have entered into joint sales agreements (JSAs), shared services agreements (SSAs), and LMAs to provide certain services for the television stations of Deerfield, the license owner of eight television stations as of September 30, 2013.  The initial term of each of the JSAs and SSAs is eight years from the commencement and the agreements may be automatically renewed for successive eight year renewal terms.  We also have purchase options to buy the License Assets of the television stations. We own the majority of the non-license assets of the Deerfield stations and we have also guaranteed the debt of Deerfield.  Additionally, there are leases in place whereby Deerfield leases assets owned by us in order to perform its duties under FCC rules. We have determined that the Deerfield stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and our guarantee of Deerfield’s debt, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Deerfield.  Included in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2013 are net revenues of $20.8 million and $59.8 million, respectively, that relate to agreements with Deerfield.

We have outsourcing agreements with certain other license owners, under which we provide certain non-programming related sales, operational and administrative services.  We pay a fee to the license owners based on a percentage of broadcast cash flow and we reimburse all operating expenses.  We also have purchase options to buy the License Assets of these television stations.  We have determined that the License Assets of these stations are VIEs, and, based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the sales and managerial services we provide and because we absorb losses and returns that would be considered significant to the VIEs.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $11.1 million and $2.6 million, respectively, that relate to these arrangements. For the nine months ended September 30, 2013 and 2012, net broadcast revenues of $30.3 million and $11.9 million, respectively, related to these arrangements.

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As of the dates indicated, the carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets for the periods presented (in thousands):

	As of September 30,2013		As of December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,243	$	3,805
Accounts receivable	1,608		110
Income taxes receivable	—		94
Current portion of program contract costs	6,529		6,113
Prepaid expenses and other current assets	221		124
Total current asset	19,601		10,246
PROGRAM CONTRACT COSTS, less current portion	2,380		1,484
PROPERTY AND EQUIPMENT, net	14,739		10,806
RESTRICTED CASH	2,102		—
GOODWILL	13,812		6,357
BROADCAST LICENSES	16,832		14,927
DEFINITE-LIVED INTANGIBLE ASSETS, net	67,237		51,368
OTHER ASSETS	12,242		12,723
Total assets	$	148,945	$	107,911
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	28	$	15
Accrued liabilities	1,130		186
Current portion of notes payable, capital leases and commercial bank financing	5,039		2,123
Current portion of program contracts payable	8,224		8,991
Total current liabilities	14,421		11,315
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	45,122		20,238
Program contracts payable, less current portion	2,954		2,080
Total liabilities	$	62,497	$	33,633

The amounts above represent the consolidated assets and liabilities of the VIEs related to our LMAs, JSAs, SSAs and other outsourcing agreements, as discussed above, for which we are the primary beneficiary, and have been aggregated as they all relate to our broadcast business.  Excluded from the amounts above are payments made to Cunningham under the LMAs which are treated as a prepayment of the purchase price of the stations and capital leases between us and Cunningham which are eliminated in consolidation.  The total payments made under these LMAs as of September 30, 2013 and December 31, 2012, which are excluded from liabilities above, were $32.4 million and $29.8 million, respectively.  The total capital lease liabilities excluded from above were $11.6 million and $11.7 million as of September 30, 2013 and December 31, 2012, respectively.  During the nine months ended September 30, 2013, Cunningham sold a portion of its investment in our Class A Common Stock which is eliminated in consolidation and excluded from assets shown above, for $7.0 million, net of income taxes and has been reflected as an increase in additional paid in capital in the consolidated balance sheet.  Also excluded from the amounts above are liabilities associated with the JSAs, SSAs, and option agreements with the other VIEs totaling $45.2 million and $36.2 million as of September 30, 2013 and December 31, 2012, respectively, as these amounts are eliminated in consolidation.  The risk and reward characteristics of the VIEs are similar.

In the fourth quarter of 2011, we began providing sales, programming and management services to the Freedom stations pursuant to a LMA.  Effective April 1, 2012, we completed the acquisition of the Freedom stations and the LMA was terminated. We determined that the Freedom stations were VIEs during the period of the LMA based on the terms of the agreement.  We were not the primary beneficiary because the owner of the stations had the power to direct the activities of the VIEs that most significantly impacted the economic performance of the VIEs.  In the consolidated statements of operations for the nine months ended September 30, 2012 are net broadcast revenues of $10.0 million and station production expenses of $7.8 million related to the Freedom LMAs during the second quarter of 2012.

We have investments in other real estate ventures and investment companies which are considered VIEs.  However, we do not participate in the management of these entities including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.  We account for these entities using the equity or cost method of accounting.

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The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying amount		Maximum exposure		Carrying amount		Maximum exposure
Investments in real estate ventures	$	3,545	$	3,545	$	3,648	$	3,648
Investments in investment companies	26,064		26,064		27,335		27,335
Total	$	29,609	$	29,609	$	30,983	$	30,983

The carrying amounts above are included in other assets in the consolidated balance sheets.  The income and loss related to these investments are recorded in income from equity and cost method investments in the consolidated statement of operations.  We recorded income of $0.7 million and $0.3 million in the three months ended September 30, 2013 and 2012, respectively.  We recorded income of $1.4 million and $7.0 million for the nine months ended September 30, 2013 and 2012, respectively.

Our maximum exposure is equal to the carrying value of our investments.  As of September 30, 2013 and December 31, 2012, our unfunded commitments related to private equity investment funds totaled $16.9 million and $8.9 million, respectively.

Recent Accounting Pronouncements

In July 2012, the FASB issued new guidance for testing indefinite-lived intangible assets for impairment.  The new guidance allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar to the approach now applied to goodwill.  Companies can first determine based on certain qualitative factors whether it is “more likely than not” (a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired.  The new standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets for impairment.  The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 30, 2012 and early adoption is permitted. We adopted this new guidance in the fourth quarter of 2012 when completing our annual impairment analysis. This guidance impacted how we perform our annual impairment testing for indefinite-lived intangible assets and changed our related disclosures for 2012; however, it does not have an impact on our consolidated financial statements as the guidance does not impact the timing or amount of any resulting impairment charges.

In February 2013, the FASB issued new guidance requiring disclosure of items reclassified out of accumulated other comprehensive income (AOCI).  This new guidance requires entities to present (either on the face of the income statement or in the notes) the effects on the line items of the income statement for amounts reclassified out of AOCI.  The new guidance is effective for annual and interim periods beginning after December 15, 2012.  This guidance does not have a material impact on our financial statements.

In July 2013, the FASB issued new guidance requiring new disclosure of unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a company does not have: (i) a net operating loss carryforward; (ii) a similar tax loss; or (iii) a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The authoritative guidance is effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2013 and should be applied on a prospective basis. We are currently evaluating the impact of this requirement on our financial statements.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities.  Actual results could differ from those estimates.

Restricted Cash

During the nine months ending September 2013, we deposited $40.6 million into escrow accounts pursuant to agreements for the acquisitions of Barrington, TTBG, and New Age.  See Note 3. Commitments and Contingencies for more information on these pending acquisitions.  These escrow deposits are classified as restricted cash within noncurrent assets in the consolidated balance sheet as of September 30, 2013.

Additionally, under the terms of certain lease agreements, as of September 30, 2013 and December 31, 2012, we were required to hold $0.2 million of restricted cash related to the removal of analog equipment from some of our leased towers.

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Revenue Recognition

Total revenues include: (i) cash and barter advertising revenues, net of agency commissions; (ii) retransmission consent fees; (iii) network compensation; (iv) other broadcast revenues and (v) revenues from our other operating divisions.

Advertising revenues, net of agency commissions, are recognized in the period during which time spots are aired.

Our retransmission consent agreements contain both advertising and retransmission consent elements.  We have determined that our retransmission consent agreements are revenue arrangements with multiple deliverables.  Advertising and retransmission consent deliverables sold under our agreements are separated into different units of accounting at fair value.   Revenue applicable to the advertising element of the arrangement is recognized similar to the advertising revenue policy noted above.  Revenue applicable to the retransmission consent element of the arrangement is recognized over the life of the agreement.

Network compensation revenue is recognized over the term of the contract. All other revenues are recognized as services are provided.

Income Taxes

Our income tax provision for all periods consists of federal and state income taxes.  The tax provision for the three and nine months ended September 30, 2013 and 2012 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized.  In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income.  In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis.  A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months and nine months ended September 30, 2013 was lower than the statutory rate primarily due to: 1) a release of a valuation allowance related to state NOL carryforwards, of $5.3 million, net of taxes, due to a law change in a state tax jurisdiction, effective for years beginning after December 31, 2014, which we expect will significantly increase the forecasted future taxable income attributable to that state and result in utilization of the state NOL carryforwards and 2) a $2.2 million adjustment to the income tax provision upon finalization of the 2012 federal income tax return, primarily related to higher than originally projected available income tax deductions.

Our effective income tax rate for the three months ended September 30, 2012 was greater than the statutory rate primarily due to an increase in the income tax reserves related to a state audit settlement in 2012.

Our effective income tax rate nine months ended September 30, 2012 was lower than the statutory rate primarily due to a release of valuation allowance of $7.7 million related to certain deferred tax assets of Cunningham as the weight of all available evidence supports realization of the deferred tax assets. The valuation allowance release determination was based primarily on the sufficiency of forecasted taxable income necessary to utilize NOLs expiring in years 2022 — 2029.  This VIE files separate income tax returns.  Any resulting tax liabilities are nonrecourse to us and we are not entitled to any benefit resulting from the deferred tax assets of the VIE.

As previously discussed above under Discontinued Operations, during the three months ended September 30, 2013, we reduced our liability for unrecognized tax benefits by $6.1 million related to discontinued operations, as we now believe that it is more likely than not that our previously unrecognized state tax position would be sustained upon review of the state tax authority, based on new information obtained during the period.  Additionally, during the second quarter of 2013, we reduced our liability for unrecognized tax benefits by $5.1 million related to discontinued operations, upon the application of limits under an available state administrative practice exception.

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the current year’s presentation.

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2.ACQUISITIONS

Four Points

Effective January 1, 2012, we completed the acquisition of the broadcast assets of Four Points, which we had previously operated pursuant to a LMA since October 1, 2011.  The acquired assets consist of the following seven stations in four markets along with the respective network affiliation or program service arrangements: KUTV (CBS) and KMYU (MNT / This TV) in Salt Lake City / St. George, UT; KEYE (CBS) in Austin, TX; WTVX (CW), WTCN (MNT) and WWHB (Azteca) in West Palm Beach / Fort Pierce / Stuart, FL; and WLWC (CW) in Providence, RI / New Bedford, MA.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Four Points $200.0 million in cash, less a working capital adjustment of $0.9 million.  The acquisition was financed with a $180.0 million draw under an incremental Term B Loan commitment under our amended Bank Credit Agreement plus a $20.0 million cash escrow previously paid in September 2011.

The results of the acquired operations are included in the financial statements of the Company beginning January 1, 2012.  Under the acquisition method of accounting, the purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	456
Program contract costs	3,731
Property and equipment	34,578
Broadcast licenses	10,658
Definite-lived intangible assets	93,800
Other assets	548
Accrued liabilities	(381		)
Program contracts payable	(5,157		)
Fair value of identifiable net assets acquired	138,233
Goodwill	60,843
Total	$	199,076

The final allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $66.9 million, the decaying advertiser base of $9.8 million, and other intangible assets of $17.1 million. These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average of 14 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  Certain measurement period adjustments have been made since the initial allocation in the first quarter of 2012, which were not material to the consolidated financial statements.

Prior to the acquisition, since October 1, 2011, we provided sales, programming and management services to the stations pursuant to an LMA.  During that period, we funded the working capital needs of the stations, which totaled $8.1 million as of December 31, 2011 and was reflected as cash flows used in operating activities within the consolidated statement of cash flows for that period.  This working capital is not reflected in the purchase price allocation presented above.

The results of operations for the three and nine months ended September 30, 2012 include the results of the Four Points stations since January 1, 2012.  Net broadcast revenues and operating income of the Four Points stations included in our consolidated statements of operations, were $17.9 million and $4.4 million for the three months ended September 30, 2013, respectively, and $54.3 million and $14.0 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income of the Four Points stations included in our consolidated statements of operations, were $18.7 million and $4.1 million for the three months ended September 30, 2012, respectively, and $52.9 million and $11.6 million for the nine months ended September 30, 2012, respectively.  These amounts exclude the operations of WLWC-TV, which was sold effective April 1, 2013 and are classified as discontinued operations in the consolidated statements of operations.  See Note 1. Nature of Operations and Summary of Significant Accounting Policies.  Net broadcast revenues and operating income (loss) of WLWC-TV were $1.4 million and $0.2 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income (loss) of WLWC-TV were $1.4 million and ($0.2) million, respectively, for the three months ended September 30, 2012 and $4.1 million and $0.1 million for the nine months ended September 30, 2012, respectively.

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Freedom

Effective April 1, 2012, we completed the acquisition of the broadcast assets of Freedom, which we had previously operated pursuant to a LMA since December 1, 2011. The acquired assets consist of the following eight stations in seven markets along with the respective network affiliation or program service arrangements: WPEC (CBS) in West Palm Beach, FL; WWMT (CBS) in Grand Rapids/Kalamazoo/Battle Creek, MI;  WRGB (CBS) and WCWN (CW) in Albany, NY; WTVC (ABC) in Chattanooga, TN; WLAJ (ABC) in Lansing, MI; KTVL (CBS) in Medford-Klamath Falls, OR; and KFDM (CBS) in Beaumont/Port Arthur/Orange, TX.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Freedom $385.0 million plus a working capital adjustment of $0.3 million.  The acquisition was financed with a draw under a $157.5 million incremental Term Loan A and a $192.5 million incremental Term B Loan commitment under our amended Bank Credit Agreement, plus a $38.5 million cash escrow previously paid in November 2011.

The results of the acquired operations are included in the financial statements of the Company beginning April 1, 2012.  Under the acquisition method of accounting, the purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	373
Program contract costs	3,520
Property and equipment	54,109
Broadcast licenses	10,424
Definite-lived intangible assets	140,963
Other assets	278
Accrued liabilities	(589		)
Program contracts payable	(3,404		)
Fair value of identifiable net assets acquired	205,674
Goodwill	179,609
Total	$	385,283

The final allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $93.1 million, the decaying advertiser base of $25.1 million, and other intangible assets of $22.8 million.  These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average life of 16 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  Certain measurement period adjustments have been made since the initial allocation in the second quarter of 2012, which were not material to the consolidated financial statements.

Prior to the acquisition, since December 1, 2011, we provided sales, programming and management services to the stations pursuant to an LMA.  During that period, we funded the working capital needs of the stations, which totaled $1.5 million as of December 31, 2011 and $9.6 million as of April 1, 2012, the date of acquisition, and was reflected as cash flows used in operating activities within the consolidated statement of cash flows for those periods.  This working capital is not reflected in the purchase price allocation presented above.

The results of operations for the nine months ended September 30, 2012 includes the results of the Freedom stations since April 1, 2012.  Net broadcast revenues and operating income of the Freedom stations included in our consolidated statements of operations, were $26.2 million and $6.7 million for the three months ended September 30, 2013, respectively, and $79.9 million and $20.8 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income of the Freedom stations included in our consolidated statements of operations, were $26.8 million and $5.0 million for the three months ended September 30, 2012, respectively, and $52.5 million and $14.0 million for the nine months ended September 30, 2012, respectively.  These amounts exclude the operations of WLAJ-TV, which was sold effective, January 1, 2013 and are classified as discontinued operations in the consolidated statements of operations.  See Note 1. Nature of Operations and Summary of Significant Accounting Policies.  Net broadcast revenues and operating income of WLAJ-TV were $0.7 million and $0.1 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating loss of WLAJ-TV were $1.1 million and $0.2 million, respectively, for the three months ended September 30, 2012 and $2.1 million and zero for the nine months ended September 30, 2012, respectively.  Additionally, during the first quarter 2012, prior to the acquisition, we recorded net broadcast revenues of $10.0 million related to the Freedom LMAs.

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Newport

Effective December 1, 2012, we completed the acquisition of certain broadcast assets of Newport Television (Newport). The acquired assets relate to the following seven stations in six markets along with the respective network affiliation or program service arrangements: WKRC (CBS) in Cincinnati, OH; WOAI (NBC) in San Antonio, TX; WHP (CBS) in Harrisburg/Lancaster/Lebanon/York, PA; WPMI (NBC) and WJTC (IND) in Mobile, AL/Pensacola, FL; KSAS (FOX) in Wichita/Hutchinson, KS; and WHAM (ABC) in Rochester, NY.  We also acquired Newport’s rights under the local marketing agreements with WLYH (CW) in Harrisburg, PA and KMTW (MNT) in Wichita, KS, as well as options to acquire the license assets.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Newport $460.5 million in cash, less a working capital adjustment of $1.3 million.  We financed the $460.5 million purchase price, less the $41.3 million in escrow with the net proceeds from the 6.125% Notes issued in October 2012.

Our right to acquire certain of the license assets of WPMI and WJTC in Mobile, AL was assigned to Deerfield and Deerfield acquired these assets effective December 1, 2012 for $6.0 million. Additionally, Deerfield acquired the license assets of WHAM in Rochester, NY effective February 1, 2013 for $6.0 million, using borrowings under its bank credit facility. Prior to Deerfield’s acquisition of the assets of WHAM, the assets were owned by Newport.  Concurrent with the acquisition of WKRC in Cincinnati, OH and WOAI in San Antonio, TX from Newport, we sold to Deerfield the license assets of two of our existing stations located in Cincinnati, OH (WSTR MNT) and San Antonio, TX (KMYS CW) for a total of $10.7 million. Deerfield financed these purchases with third party bank financing which we have guaranteed. We have assignable purchase option agreements with Deerfield to acquire the license assets upon FCC approval and operate the stations pursuant to shared services and joint sales agreements with Deerfield. We consolidate the license assets owned by Deerfield because the licensee companies are VIEs and we are the primary beneficiary. Prior to Deerfield acquiring the license assets of WHAM in Rochester, NY on February 1, 2013, we operated the station pursuant to a shared services and joint sales agreement with Newport. We consolidated the license assets owned by Newport from December 1, 2012 to January 31, 2013 because the licensee company was a VIE and the Company is the primary beneficiary. See Variable Interest Entities in Note 1.  Nature of Operations and Summary of Significant Accounting Policies.  The purchase of the license assets by Deerfield in February 2013 was accounted for as a transaction between parties under common control.

Under the acquisition method of accounting, the results of the acquired operations are included in the financial statements of the Company beginning December 1, 2012. The initial purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values. The initial purchase price allocated includes $460.5 million paid for certain broadcast assets of the seven stations from Newport and the rights under the LMAs with the two other stations, $6.0 million paid by Deerfield for the license assets of WPMI and WJTC and $6.0 million paid by Deerfield for the license assets of WHAM, and $0.2 million of noncontrolling interests related to the WLYH VIE, less a working capital adjustment of $1.3 million. The sale of the license assets of WSTR in Cincinnati, OH and KMYS in San Antonio, TX was considered a transaction between parties under common control and therefore was not included in the purchase price allocation. The purchase price allocation is preliminary pending a final determination of the fair values of the assets and liabilities. The initial allocated fair value of acquired assets and assumed liabilities, including the assets owned by VIEs, is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	1,390
Program contract costs	10,378
Property and equipment	53,883
Broadcast licenses	15,581
Definite-lived intangible assets	240,013
Other assets	1,097
Accrued liabilities	(3,928		)
Program contracts payable	(11,634		)
Fair value of identifiable net assets acquired	306,780
Goodwill	164,621
Total	$	471,401

The preliminary allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $176.0 million, the decaying advertiser base of $23.7 million, and other intangible assets of $40.3 million. These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average of 14 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  The preliminary purchase price allocation is based upon all information available to us at the present time and is subject to change,

16

and such changes could be material.  Certain measurement period adjustments have been made since the initial allocation in the fourth quarter of 2012, which were not material to our consolidated financial statements.

Net broadcast revenues and operating income of the Newport stations included in our consolidated statements of operations, were $36.1 million and $5.5 million for the three months ended September 30, 2013, respectively, and $109.3 million and $25.3 million for the nine months ended September 30, 2013, respectively.

Fisher Communications

Effective August 8, 2013, we completed the acquisition of all of the outstanding common stock of Fisher Communications, Inc. (Fisher). We paid $373.2 million to the shareholders of the Fisher common stock, representing $41.0 per common share. We financed the total purchase price with cash on hand. Fisher owns certain broadcast assets related to the following twenty-two stations, and four radio stations in 8 markets along with the respective network affiliation or program service arrangements: KOMO (ABC) and KUNS (Univision) in Seattle-Tacoma, WA; KATU (ABC), KUNP(Univision), and KUNP-LP (Univision) in Portland, OR; KLEW (CBS) in Spokane, WA; KBOI (CBS) and KYUU-LD (CW) in Boise, ID; KVAL (CBS), KCBY (CBS), KPIC (CBS), KMTR (NBC), KMCB (NBC), and KTCW (NBC) in Eugene, OR; KIMA (CBS), KEPR (CBS), KUNW-CD (Univision), and KVVK-CD (Univision), in Yakima/Pasco/Richland/Kennewick, WA; KBAK (CBS) and KBFX-CD (FOX) in Bakersfield, CA; as well as KIDK (CBS/FOX) and KXPI (FOX) in Idaho Falls/Pocatello, ID. The four radio stations acquired are: KOMO (AM/FM), KPLZ (FM) and KVI (AM) in the Seattle/Tacoma, WA market.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

The results of the acquired operations are included in the financial statements of the Company beginning on August 8, 2013.  Under the acquisition method of accounting, the initial purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocation reflects the consolidation of net assets of the third party which owns the license and related assets of KMTR in Eugene, OR, which we have consolidated, as the licensee is considered to be a VIE and we are the primary beneficiary of the variable interests. Additionally, another third party that performs certain services pursuant to outsourcing agreement to our stations in Idaho Falls, ID  (KIDK and KXPI), has exercised an existing purchase option to purchase the broadcast assets of the two stations for $5.9 million.  These assets have been classified as assets held for sale in the initial purchase price allocation and in our consolidated balance sheet as of September 30, 2013.  Also included in the liabilities assumed are obligations under a noncontributory supplemental retirement program that covers former members of management of Fisher.  The program was frozen in 2005 and does not include any active employees.  The estimated projected benefit obligation at the acquisition date was $23.5 million, based on an estimated discount rate of 3.6%.  Fisher had funded the obligation with annuity contracts and life insurance policies, which Fisher was the owner and beneficiary.  Included in the assets acquired are the estimated fair value based on the cash value of the annuity contracts and cash surrender value of the life insurance policies, totaling $17.9 million.  The purchase price allocation is preliminary pending a final determination of the fair values of the assets and liabilities. The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Cash	$	13,531
Accounts Receivable	29,962
Prepaid expenses and other current assets	2,079
Program contract costs	10,954
Property and equipment	48,616
Broadcast licenses	11,058
Definite-lived intangible assets	156,332
Other assets	24,632
Assets Held for Sale	5,900
Accounts payable and accrued liabilities	(20,342		)
Program contracts payable	(10,954		)
Deferred Tax Liability	(50,416		)
Other long-term liabilities	(25,482		)
Fair value of identifiable net assets acquired	195,870
Goodwill	177,326
Total	$	373,196

The preliminary allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $100.6 million, the decaying advertiser base of $15.0 million, and other intangible assets of $40.8 million.  These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average life of 15 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill deductible for tax purposes will be approximately $19.5 million.

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The results of operations for the three and nine months ended September 30, 2013 includes the results of the Fisher stations since August 8, 2013.  Net broadcast revenues and operating income of the Fisher stations included in our consolidated statements of operations, were $25.9 million and $8.2 million for the three and nine months ended September 30, 2013.  Post-acquisition, we recognized $4.3 million of severance expense related to certain Fisher executives and employees that have been or will be terminated who had existing agreements in place prior to close.

Pro Forma Information

The following table sets forth unaudited pro forma results of continuing operations for the three and nine months ended September 30, 2012, assuming that the acquisitions of the Freedom, Newport, and Fisher stations discussed above, along with transactions necessary to finance the acquisitions, occurred at the beginning of the annual period presented (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Total revenues	$	354,545	$	335,849	$	1,030,175	$	972,305
Net Income	$	28,380	$	29,877	$	57,487	$	84,146
Net Income attributable to Sinclair Broadcast Group	$	28,071	$	29,733	$	57,072	$	84,139
Basic and diluted earnings per share attributable to Sinclair Broadcast Group	$	0.28	$	0.37	$	0.70	$	1.04

The results of operations of the Four Points stations were included in our consolidated statements of operations for the three and nine months ended September 30, 2013 and 2012.  The results of operations, of all of the aforementioned acquired stations, were included in our consolidated statement of operations for the three and nine months ended September 30, 2013.

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the annual period presented.  The pro forma adjustments reflect depreciation expense, amortization of intangibles and amortization of program contract costs related to the fair value adjustments of the assets acquired, additional interest expense related to the financing of the transactions, exclusion of nonrecurring financing and transaction related costs, alignment of accounting policies and the related tax effects of the adjustments.  The pro forma revenues exclude the revenues of WLAJ-TV, which are classified as discontinued operations in the consolidated statements of operations.  Total revenues of WLAJ-TV, which are excluded from the pro forma results above for the nine months ended September 30, 2013 were $1.0 million.

Other Acquisitions

We acquired five other television stations during the year ended December 31, 2012 in three markets. The initial purchase price allocated includes $45.1 million paid for certain broadcast assets of these stations, less working capital adjustments of $0.7 million, and $4.4 million of non-controlling interests related to, and amounts paid by certain VIEs for the license assets of certain of these stations owned by VIEs that we consolidate. In addition to the Fisher acquisition, we acquired eight television stations during the first nine months of 2013 in six markets, which four of the six markets were acquired from Cox Media Group in May 2013. Additionally, two of the eight stations were acquired in one market from TTBG LLC (TTBG) on September 30, 2013. The initial purchase price allocated includes $136.9 million paid for certain broadcast assets of these stations, less working capital adjustments of $4.4 million, plus $3.1 million paid by Deerfield for the license assets of certain of these stations owned by VIEs that we consolidate. We allocated the total purchase price of these within the respective years, as follows (in thousands):

	2013			2012
Prepaid expenses and other current assets	$	1,991		$	160
Program contract costs	7,594			1,638
Property and equipment	35,439			16,545
Broadcast licenses	1,611			2,679
Definite-lived intangible assets	48,049			22,546
Accrued liabilities	(2,086		)	(1,178		)
Program contracts payable	(7,625		)	(4,252		)
Fair value of identifiable net assets acquired	84,973			38,138
Goodwill	50,674			10,661
Total	$	135,647		$	48,799

In December 2012, we acquired the license assets of WTTA-TV in Tampa/St. Petersburg, Florida from Bay Television, Inc. (Bay TV). Prior to December 1, 2012, we performed sales, programming and other management services to the station pursuant to an LMA which was terminated upon closing. As discussed in Note 6. Related Person Transactions, our controlling shareholders own a

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controlling interest in Bay TV. As this was considered a transaction between entities under common control, the acquisition method of accounting was not applied, and the assets acquired were recorded at their historical cost basis and the difference between the purchase price and the historical cost basis of the assets of $23.6 million, net of taxes of $15.6 million, was recorded as a reduction in additional paid-in capital. A substantial portion of the purchase price will be deductible for tax purposes in future periods. Net broadcast revenues and operating income of these stations, included in our consolidated statements of operations were $29.5 million and $6.7 million for the three months ended September 30, 2013, respectively, and $47.0 million and $10.5 million for the nine months ended September 30, 2013, respectively.

In conjunction with all acquisitions in 2012 and 2013, we incurred transaction costs of approximately $3.5 million, which are reported in general and administrative expenses in the accompanying consolidated statements of operations, as incurred.  For the three and nine months ended September 30, 2013, such costs totaled $0.1 million and $1.0 million, respectively.  For the three and nine months ended September 30, 2012, there were $0.4 and $0.9 million, respectively.  These costs were not included in the pro forma amounts above as they are nonrecurring in nature.

3.COMMITMENTS AND CONTINGENCIES:

Litigation

We are party to lawsuits and claims from time to time in the ordinary course of business.  Actions currently pending are in various preliminary stages and no judgments or decisions have been rendered by hearing boards or courts in connection with such actions.  After reviewing developments to date with legal counsel, our management is of the opinion that the outcome of our pending and threatened matters will not have a material adverse effect on our consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.

Various parties have filed petitions to deny our applications or our LMA partners’ applications for the following stations’ license renewals: WXLV-TV, Winston-Salem, North Carolina; WMYV-TV, Greensboro, North Carolina; WLFL-TV, Raleigh / Durham, North Carolina; WRDC-TV, Raleigh / Durham, North Carolina; WLOS-TV, Asheville, North Carolina, WMMP-TV, Charleston, South Carolina; WTAT-TV, Charleston, South Carolina; WMYA-TV, Anderson, South Carolina; WICS-TV Springfield, Illinois; WBFF-TV, Baltimore, Maryland; KGAN-TV, Cedar Rapids, Iowa; WTTE-TV, Columbus, Ohio; WRGT-TV, Dayton, Ohio; WVAH-TV, Charleston / Huntington, West Virginia; WCGV-TV, Milwaukee, Wisconsin; WTTO-TV, Birmingham, AL; KXVO-TV, Omaha, NE (acquired on October 1, 2013); WNAB-TV, Nashville, TN; WPMI-TV, Mobile, AL; WWHO-TV, Chillicothe, OH and WUTB-TV in Baltimore, MD.  The FCC is in the process of considering the renewal applications and we believe the petitions have no merit.

Network Affiliations

On May 14, 2012, the Company and the licensees of stations to which we provide services, representing 20 affiliates of Fox Broadcast Company (FOX), extended the network affiliation agreements with FOX from the existing term of December 31, 2012 to December 31, 2017.  Concurrently, we entered into an assignable option agreement with Fox Television Stations, Inc. (FTS) giving us or our assignee the right to purchase substantially all the assets of the WUTB station (Baltimore, MD) owned by FTS, which had a program service arrangement with MyNetworkTV, for $2.7 million.  In October 2012, we exercised our option and purchased the assets of WUTB effective June 1, 2013.   As part of this transaction, we also granted options to FTS to purchase the assets of television stations we own in up to three out of four designated markets, which options expired unexercised.  In the second quarter of 2012, we paid $25.0 million to FOX pursuant to the agreements and we recorded $50.0 million in other assets and $25.0 million of other accrued liabilities within the consolidated balance sheet, representing the additional obligation due to FOX which was paid in the second quarter of 2013.  The $50.0 million asset is being amortized through the current term of the affiliation agreement ending on December 31, 2017.  Approximately $2.2 million and $6.6 million of amortization expense has been recorded in the consolidated statement of operations for the three and nine months ended September 30, 2013, respectively.  Approximately $2.2 million and $3.3 million of amortization expense has been recorded in the consolidated statement of operations during the three and nine months ended September 30, 2012.  In addition, we are required to pay to FOX programming payments under the terms of the affiliation agreements.  These payments are recorded in station production expenses as incurred.

Pending Acquisitions

In February 2013, we entered into an agreement to purchase the broadcast assets of eighteen television stations owned by Barrington Broadcasting Group, LLC (Barrington) for $370.0 million, less amounts to be paid by third parties, and entered into agreements to operate or provide sales services to another six stations. The twenty-four stations are located in fifteen markets. Also, the Company will sell its station WSYT-TV (FOX) and assign its LMA with WNYS-TV (MNT) in Syracuse, NY to a third party, and sell its station in Peoria IL, WYZZ-TV (FOX) to Cunningham due to FCC conflict ownership rules. The transaction is expected to close in the fourth quarter of 2013 subject to the approval of the FCC, antitrust clearance, and customary closing conditions.  We expect to fund the purchase price through cash on hand or a delayed draw under our bank credit agreement.

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In July 2013, we entered into a definitive agreement to purchase the stock of Perpetual Corporation and the equity interest of Charleston Television, LLC, both owned and controlled by the Allbritton family (Allbritton), for an aggregate purchase price of $985.0 million. The Allbritton stations consist of seven ABC Network affiliates and NewsChannel 8, a 24-hour cable/satellite news network covering the Washington D.C. metropolitan area. The transaction is expected to close late in the first quarter of 2014 or early in the second quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions.   We expect to fund the purchase price at closing through additional borrowings under our bank credit facility.  Additionally, to comply with FCC local television ownership rules, we expect to sell the license and certain related assets of existing stations in Birmingham, AL - WABM (MNT) and WTTO (CW), Harrisburg/Lancaster/Lebanon/York, PA - WHP (CBS), and Charleston, SC - WMMP (MNT) and to provide sales and other non-programming support services to each of these stations pursuant to customary shared services and joint sales agreements.

In September 2013, we entered into a definitive agreement to purchase the broadcast assets of eight television stations owned by New Age Media located in three markets, for an aggregate purchase price of $90.0 million. The transaction is expected to close in the first quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions.  We expect to fund the purchase price through cash on hand or a delayed draw under our bank credit agreement. Additionally, Wilkes/Barre/Scranton, PA – WSWB, Tallahassee, FL – WTLH and WTLF and Gainesville, FL – WMBW will be purchased by a third party; we will continue to provide sales and other non-programming support services to each of these stations, pursuant to customary share services and joint sales agreements.

In June 2013, we entered into a definitive agreement to purchase the stock and broadcast assets of four television stations owned by TTBG LLC (TTBG) located in three markets for $115.4 million.  Also, the Company will assign its right to purchase the license related assets of two of the stations to Deerfield due to FCC conflict ownership rules.  The Company will provide sales and other services to these two Deerfield stations.  We completed the acquisition of two of the four stations on September 30, 2013.  We completed the acquisition of the remaining two stations on October 1, 2013. We expect to fund the purchase price through cash on hand.

4.NOTES PAYABLE AND COMMERCIAL BANK FINANCING

Bank Credit Agreement

On April 9, 2013, we entered into an amendment and restatement (the April Amendment) of our credit agreement (as amended, the April Bank Credit Agreement).  Pursuant to the April Amendment, we refinanced the existing facility and replaced the existing term loans under the facility with a new $500.0 million term loan A facility (Term Loan A), maturing April 2018 and priced at LIBOR plus 2.25%; and a $400.0 million term loan B facility (Term Loan B), maturing April 2020 and priced at LIBOR plus 2.25% with a LIBOR floor of 0.75%.

In addition, we replaced our existing revolving line of credit with a new $100.0 million revolving line of credit maturing April 2018 and priced at LIBOR plus 2.25%.  The proceeds from the term loans, along with cash on hand and/or a draw under the revolving line of credit, will be used to fund future acquisitions.

Due to timing related to the closing and funding requirements of the pending acquisitions, approximately $445.0 million of the new Term Loan A was drawn on a delayed basis, in October 2013.  We also amended certain terms of the April Bank Credit Agreement, including increased uncommitted incremental loan capacity, increased television station acquisition capacity and increased flexibility under the restrictive covenants.

We recognized a loss on extinguishment of the old facility, primarily related to the repayment of the previous term loan B with proceeds from the 5.375% Notes, of $16.3 million, consisting of deferred financing costs and debt discount.  Of the financing costs incurred related to the April Amendment, $9.7 million was capitalized as deferred financing costs and $2.4 million was charged to interest expense during the nine months ended September 30, 2013.  During the three months ended September 30, 2013, we revised the amount of capitalized fees originally recorded of $7.3 million to $9.7 million, resulting in a reduction in interest expense of $2.4 million during the third quarter.  The impact of the revision is not material to the financial statements of any period.

On October 23, 2013, we entered into an amendment and restatement (the October Amendment) of our bank credit agreement (as amended, the October Bank Credit Agreement). Pursuant to the amendment, we raised $450.0 million of incremental loans, which consisted of $200.0 million in incremental delayed draw term loan A loans, maturing April 2018 and priced at LIBOR plus 2.25%; and $250.0 million in incremental term loan B loans, maturing April 2020 and priced at LIBOR plus 2.25% with a LIBOR floor of 0.75%.  The October Amendment raised the total capacity of the term loan A and B loans to $700.0 million and $650.0 million, respectively.  In addition, we obtained an additional $57.5 million of capacity under our revolving line of credit maturing April 2018.  The terms loans are expected to be used to fund future acquisitions and for general corporate purposes.    We also amended certain terms of the Bank Credit Agreement, including increased uncommitted incremental loan capacity, increased television station acquisition capacity and increased flexibility under the restrictive covenants.  We expect to incur $10.6 million in financing costs related to the October Amendment, which we expect to capitalize as deferred financing costs.

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6.375% Senior Notes, due 2021

On October 11, 2013, we issued $350.0 million in senior unsecured notes, which bear interest at a rate of 6.375% per annum and mature on November 1, 2021 (the 6.375% Notes), pursuant to an indenture dated October 11, 2013 (the 6.375% Indenture). The 6.375% Notes were priced at 100% of their par value and interest is payable semi-annually on May 1 and November 1, commencing on May 1, 2014. Prior to November 1, 2016, we may redeem the 6.375% Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium as set forth in the 6.375% Indenture. In addition, on or prior to November 1, 2016, we may redeem up to 35% of the 6.375% Notes using the proceeds of certain equity offerings. If we sell certain of our assets or experience specific kinds of changes of control, holder of the 6.375% Notes may require us to repurchase some or all of the Notes.  Upon the sale of certain of our assets or certain changes of control, the holders of the 6.375% Notes may require us to repurchase some or all of the notes.  The proceeds from the offering of the 6.375% Notes were used to partially fund the redemption of the 9.25% Senior Secured Second Lien Notes, Due 2017 (the 9.25% Notes), as discussed further below. Concurrent with entering into an indenture for the 6.375% Notes in October 2013, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 6.375% Notes for registered securities with the Securities and Exchange Commission (the SEC) by July 8, 2014.

5.375% Senior Unsecured Notes, due 2021

On April 2, 2013, we issued $600.0 million of senior unsecured notes, which bear interest at a rate of 5.375% per annum and mature on April 1, 2021 (the 5.375% Notes), pursuant to an indenture dated April 2, 2013 (the 5.375% Indenture).  The 5.375% Notes were priced at 100% of their par value and interest is payable semi-annually on April 1 and October 1, commencing on October 1, 2013.  Prior to April 1, 2016, we may redeem the 5.375% Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the 5.375% Notes plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the 5.375% Indenture.  Beginning on April 1, 2016, we may redeem some or all of the 5.375% Notes at any time or from time to time at a redemption price set forth in the 5.375% Indenture.  In addition, on or prior to April 1, 2016, we may redeem up to 35% of the 5.375% Notes using proceeds of certain equity offerings.  Upon the sale of certain of our assets or certain changes of control, the holders of the 5.375% Notes may require us to repurchase some or all of the notes.  The net proceeds from the offering of the 5.375% Notes were used to pay down outstanding indebtedness under our bank credit facility. Concurrent with entering into an indenture for the 5.375% Notes in April 2013, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 5.375% Notes for registered securities with the Securities and Exchange Commission (the SEC) by December 28, 2013.  We filed a registration statement on Form S-4 with the SEC on April 4, 2013, which became effective on April 16, 2013.  An exchange offer was launched on May 23, 2013 to exchange the unregistered 5.375% Notes with the holders for 5.375% Notes registered under the Securities Act of 1933.  The exchange offer was completed on June 28, 2013 with 100% of the $600.0 million 5.375% Senior Unsecured Notes due 2021 tendered in the exchange offer.

6.125% Senior Unsecured Notes, due 2022

Concurrent with entering into an indenture for the 6.125% Notes in October 2012, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 6.125% Notes for registered securities with the Securities and Exchange Commission (the SEC) by July 8, 2013.  We filed a registration statement on Form S-4 with the SEC on April 4, 2013 which became effective on April 16, 2013.  An exchange offer was launched on May 23, 2013 to exchange the unregistered 6.125% Notes with the holders for 6.125% Notes registered under the Securities Act of 1933.  The exchange offer was completed on June 28, 2013 with 100.0% of the $500.0 million 6.125% Senior Unsecured Notes due 2022 tendered in the exchange offer.

9.25% Convertible Senior Notes

Effective October 12, 2013, we redeemed all of the outstanding 9.25% Senior Secured Second Lien Notes, representing $500.0 million in aggregate principal amount.  Upon the redemption, along with the principal, we paid the accrued and unpaid interest and a make whole premium of $25.4 million, for a total of $546.1 million paid to noteholders.  We expect to record a loss on extinguishment of $43.1 million in the fourth quarter of 2013 related to this redemption.

4.875% Convertible Senior Notes, due 2018 and 3.0% Convertible Senior Notes, Due 2027

In September 2013, 100% of the outstanding 4.875% Convertible Senior Notes, due in 2018 (the 4.875% Notes), representing aggregate principal of $5.7 million, were converted into 388,632 shares of Class A Common Stock, as permitted under the indenture, resulting in an increase in additional paid-in capital of $7.3 million, net of income taxes.

In October 2013, 100% of the outstanding 3.0% Convertible Senior Notes, due in 2027 (the 3.0% Notes), representing aggregate principal of $5.4 million, were converted and settled fully in cash of $10.5 million, as permitted under the indenture.  As the original terms of the indenture included a cash conversion feature, the effective settlement of the liability and equity components will be accounted for separately.  We expect the redemption of the liability component to result in a $0.9 million gain on extinguishment,

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and the redemption of the equity component will be recorded as a reduction in additional paid-in capital, net of taxes.

5.EARNINGS PER SHARE

The following table reconciles income (numerator) and shares (denominator) used in our computations of diluted earnings per share for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Income (Numerator)
Income from continuing operations	$	30,551		$	26,477		$	60,022		$	85,736
Income impact of assumed conversion of the 4.875% Notes, net of taxes	—			45			—			135
Net (income) loss attributable to noncontrolling interests included in continuing operations	(309		)	(107		)	(415		)	106
Numerator for diluted earnings per common share from continuing operations available to common shareholders	30,242			26,415			59,607			85,977
Income (loss) from discontinued operations, net of taxes	6,100			(125		)	11,558			(178		)
Numerator for diluted earnings available to common shareholders	$	36,342		$	26,290		$	71,165		$	85,799
Shares (Denominator)
Weighted-average common shares outstanding	99,473			81,081			90,982			80,990
Dilutive effect of stock settled appreciation rights, restricted stock awards and outstanding stock options	766			44			567			23
Dilutive effect of 4.875% Notes	—			254			—			254
Weighted-average common and common equivalent shares outstanding	100,239			81,379			91,549			81,267

Potentially dilutive securities representing zero and 1.4 million shares of common stock for the three months ended September 30, 2013 and 2012, respectively, and zero and 1.5 million shares of common stock for the nine months ended September 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per common share for these periods because their effect would have been antidilutive.  The decrease in potentially dilutive securities is primarily related to the increase in share price during the quarter ending September 30, 2013.

The diluted effect of the 3.0% Notes are excluded from diluted earnings available to common shareholders and the weighted-average common and common equivalent shares outstanding, for the three and nine month periods ended September 30, 2013, due to the conversion of the 3.0% Notes on September 20, 2013 and settled in cash on October 24, 2013.  The dilutive effect of the 3.0% Notes would have had affected diluted earnings per share by less than $0.01, for the three and nine month periods ended September 30, 2013.  See Note 4. Notes Payable and Commercial Bank Financing for further discussion.

6.RELATED PERSON TRANSACTIONS

Transactions with our controlling shareholders. David, Frederick, J. Duncan and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of the Class B Common Stock and some of our Class A Common Stock.  We engaged in the following transactions with them and/or entities in which they have substantial interests.

Leases.  Certain assets used by us and our operating subsidiaries are leased from Cunningham Communications Inc., Keyser Investment Group, Gerstell Development Limited Partnership and Beaver Dam, LLC (entities owned by the controlling shareholders).  Lease payments made to these entities were $1.3 million and $1.2 million for the three months ended September 30, 2013 and 2012 and $3.8 million and $3.4 million for the nine months ended September 30, 2013 and 2012, respectively.

Bay TV.  In January 1999, we entered into an LMA with Bay TV, which owns the television station WTTA-TV in the Tampa / St. Petersburg, Florida market.  Each of our controlling shareholders owns a substantial portion of the equity of Bay TV and collectively they have a controlling interest.  On December 1, 2012, we purchased substantially all of the assets of Bay TV for

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$40.0 million. Our board of directors obtained a fairness opinion on the purchase price from a third party valuation firm. Concurrent with the acquisition, our LMA with Bay TV was terminated. Payments made to Bay TV were $2.9 million, $2.2 million and $1.7 million for the years ended December 31, 2012, 2011 and 2010, respectively.  We received $0.5 million for the year ended December 31, 2010 from Bay TV for certain equipment leases which expired on November 1, 2010. The LMA with Bay TV has been approved pursuant to the current related person transaction policy.

Charter Aircraft.  From time to time, we charter aircraft owned by certain controlling shareholders.  We incurred $0.3 million and $0.6 million for the three and nine months ended September 30, 2013, respectively.  We incurred $0.2 million and $0.5 million for the three and nine months ended September 30, 2012, respectively.

Cunningham Broadcasting Corporation.  As of September 30, 2013, Cunningham was the owner-operator and FCC licensee of: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WTAT-TV Charleston, South Carolina; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; and WDBB-TV Birmingham, Alabama (collectively, the Cunningham Stations).  In addition to these Cunningham stations, Cunningham purchased the license assets of KDBC-TV, El Paso, TX which is managed by another party under a JSA agreement, in July 2013 for $21.0 million.  On October 1, 2013, we purchased the station from Cunningham for $21.0 million.

During the first quarter of 2013, the estate of Carolyn C. Smith, a parent of our controlling shareholders, distributed all of the non-voting stock owned by the estate to our controlling shareholders, and a portion was repurchased by Cunningham for $1.7 million in the aggregate.  As of September 30, 2013, our controlling shareholders own approximately 4.4% of the total capital stock of Cunningham, none of which have voting rights.  The remaining amount of non-voting stock is owned by trusts established for the benefit of the children of our controlling shareholders.  The estate of Mrs. Smith currently owns all of the voting stock.  The sale of the voting stock by the estate to an unrelated party is pending approval of the FCC.  We have options from the trusts, which grant us the right to acquire, subject to applicable FCC rules and regulations, 100% of the voting and nonvoting stock of Cunningham. We also have options from each of Cunningham’s subsidiaries, which are the FCC licensees of the Cunningham stations, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of Cunningham’s individual subsidiaries.

In addition to the option agreements, we have LMAs with the Cunningham Stations to provide programming, sales and managerial services to the stations.  Each of the LMAs has a current term that expires on July 1, 2016 and there are three additional 5-year renewal terms remaining with final expiration on July 1, 2031.

Effective November 5, 2009, we entered into amendments and/or restatements of the following agreements between Cunningham and us: (i) the LMAs, (ii) option agreements to acquire Cunningham stock and (iii) certain acquisition or merger agreements relating to the Cunningham Stations.

Pursuant to the terms of the LMAs, options and other agreements, beginning on January 1, 2010 and ending on July 1, 2012, we were obligated to pay Cunningham the sum of approximately $29.1 million in 10 quarterly installments of $2.75 million and one quarterly payment of approximately $1.6 million, which amounts were used to pay down Cunningham’s bank credit facility and which amounts were credited toward the purchase price for each Cunningham station.  An additional $1.2 million was paid on July 1, 2012 and another installment of $2.75 million was paid on October 1, 2012 as an additional LMA fee and was used to pay off the remaining balance of Cunningham’s bank credit facility.  The aggregate purchase price of the television stations, which was originally $78.5 million pursuant to certain acquisition or merger agreements subject to 6% annual increases, was decreased by each payment made by us to Cunningham, through 2012, up to $29.1 million in the aggregate, pursuant to the foregoing transactions with Cunningham as such payments are made.  Beginning on January 1, 2013, we are obligated to pay Cunningham an annual LMA fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue and (ii) $5.0 million, of which a portion of this fee will be credited toward the purchase price to the extent of the annual 6% increase.  The remaining purchase price as of September 30, 2013 was approximately $57.1 million.

Additionally, we reimbursed Cunningham for 100% of its operating costs, and paid Cunningham a monthly payment of $50,000 through December 2012 as an LMA fee.

We made payments to Cunningham under these LMAs and other agreements of $2.3 million and $4.0 million for the three months ended September 30, 2013 and 2012 respectively, and $6.8 million and $11.9 million for the nine months ended September 30, 2013 and 2012, respectively.  For the three months ended September 30, 2013 and 2012, Cunningham’s stations provided us with approximately $24.5 million and $25.5 million, respectively, and approximately $75.7 million and $73.5 million for the nine months ended September 30, 2013 and 2012, respectively, of total revenue.  The financial statements for Cunningham are included in our consolidated financial statements for all periods presented.  Our Bank Credit Agreement contains certain cross-default provisions with certain material third-party licenses.  As of September 30, 2013, Cunningham was the sole material third-party licensee.  In connection with the October Amendment of our Bank Credit Agreement (see Note 4. Notes Payable and Commercial Bank Financing), certain terms changed resulting in Cunningham no longer being considered a material third party licensee.

23

Atlantic Automotive.  We sold advertising time to and purchased vehicles and related vehicle services from Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company.  David D. Smith, our President and Chief Executive Officer, has a controlling interest in, and is a member of the Board of Directors of Atlantic Automotive. We received payments for advertising time totaling less than $0.1 million for each of the three months ended September 30, 2013 and 2012. We received payments for advertising time totaling $0.1 million and $0.1for the nine months ended September 30, 2013 and 2012, respectively. We paid $0.2 million and $1.1 million for vehicles and related vehicle services from Atlantic Automotive for the three and nine months ended September 30, 2013, respectively, and paid $0.5 million and $1.1 million for the three and nine months ended September 30, 2012. Additionally, in August 2011, Atlantic Automotive entered into an office lease agreement with Towson City Center, LLC (Towson City Center), a subsidiary of one of our real estate ventures, and began occupying the space in June 2012.  Atlantic Automotive paid $0.3 million and $0.7 million in rent during the three and nine months ended September 30, 2013, respectively. Atlantic Automotive made no rent payments during the nine months ended June 30, 2012.

Leased property by real estate ventures. Certain of our real estate ventures have entered into leases with entities owned by David Smith to lease restaurant space. There are leases for three restaurants in a building owned by one of our consolidated real estate ventures in Baltimore, MD.  Total rent received under these leases was less than $0.1 million for each of the three months ended September 30, 2013 and 2012. Total rent received under these leases was less than $0.2 million and less than $0.1 million for the nine months ended September 30, 2013 and 2012, respectively. There is also one lease for a restaurant in a building owned by one of our real estate ventures, accounted for under the equity method, in Towson, MD. We received under this lease less than $0.1 million for the three and nine months ending September 30, 2013.

Thomas & Libowitz P.A.  A. Thomas, a partner and founder of Thomas & Libowitz, P.A. (Thomas & Libowitz), a law firm providing legal services to us on an ongoing basis, is the son of a former member of the Board of Directors, Basil A. Thomas.  We paid fees of $0.3 million to Thomas & Libowitz for each of the three months ended September 30, 2013 and 2012.  For the nine months ended September 30, 2013 and 2012, we paid fees of $1.3 million and $0.7 million, respectively, to Thomas & Libowitz.

7.SEGMENT DATA

We measure segment performance based on operating income (loss).  Excluding discontinued operations, our broadcast segment includes stations in 58 markets located throughout the continental United States. The operating results of WLAJ-TV and WLWC-TV, which were sold effective March 1, 2013 and April 1, 2013, respectively, are classified as discontinued operations and are not included in our consolidated results of continuing operations for the nine months ended September 30, 2013 and 2012. Our other operating divisions primarily consist of sign design and fabrication; regional security alarm operating and bulk acquisitions and real estate ventures. All of our other operating divisions are located within the United States.  Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location.  Our Other Operating Divisions and Corporate are not reportable segments but are included for reconciliation purposes.  We had approximately $171.7 million and $171.2 million of intercompany loans between the broadcast segment, operating divisions and corporate as of September 30, 2013 and 2012, respectively.  We had $5.0 million in intercompany interest expense related to intercompany loans between the broadcast segment, other operating divisions and corporate for the both three months ended September 30, 2013, and 2012, respectively.   For the nine months ended September 30, 2013 and 2012, we had $15.0 million and $14.9 million, respectively, in intercompany interest expense.  Intercompany loans and interest expense are excluded from the tables below.  All other intercompany transactions are immaterial.

Financial information for our operating segments are included in the following tables for the periods presented (in thousands):

For the three months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	323,681	$	14,963		$	—		$	338,644
Depreciation of property and equipment	16,579		481			348			17,408
Amortization of definite-lived intangible assets and other assets	15,851		1,317			—			17,168
Amortization of program contract costs and net realizable value adjustments	19,229		—			—			19,229
General and administrative overhead expenses	14,633		576			900			16,109
Operating income (loss)	74,210		(113		)	(1,249		)	72,848
Interest expense	—		846			39,021			39,867
Income from equity and cost method investments	—		1,571			—			1,571
Assets	3,303,838		306,204			7,631			3,617,673

24

For the three months ended September 30, 2012	Broadcast		Other Operating Divisions		Corporate			Consolidated
Revenue	$	246,202	$	12,512	$	—		$	258,714
Depreciation of property and equipment	11,864		380		382			12,626
Amortization of definite-lived intangible assets and other assets	9,556		1,006		—			10,562
Amortization of program contract costs and net realizable value adjustments	14,296		—		—			14,296
General and administrative overhead expenses	7,325		215		746			8,286
Operating income (loss)	78,988		538		(1,128		)	78,398
Interest expense	—		962		34,332			35,294
Income from equity and cost method investments	—		1,919		—			1,919

For the nine months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	896,153	$	39,263		$	—		$	935,416
Depreciation of property and equipment	44,739		1,330			1,039			47,108
Amortization of definite-lived intangible assets and other assets	45,089		3,638			—			48,727
Amortization of program contract costs and net realizable value adjustments	56,746		—			—			56,746
General and administrative overhead expenses	34,991		1,136			2,679			38,806
Operating income (loss)	224,652		(150		)	(3,718		)	220,784
Interest expense	—		2,385			120,644			123,029
Income from equity and cost method investments	—		115			—			115

For the nine months ended September 30, 2012	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	693,553	$	38,609		$	—		$	732,162
Depreciation of property and equipment	31,768		1,115			1,148			34,031
Amortization of definite-lived intangible assets and other assets	23,021		3,354			—			26,375
Amortization of program contract costs and net realizable value adjustments	43,565		—			—			43,565
General and administrative overhead expenses	21,932		1,130			2,104			25,166
Operating income (loss)	213,618		(172		)	(3,265		)	210,181
Interest expense	—		2,517			89,484			92,001
Income from equity and cost method investments	—		8,343			—			8,343

25

8.FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).  A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value.  The following is a brief description of those three levels:

·Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

·Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

·Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The carrying value and fair value of our notes and debentures for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 2:
9.25% Senior Second Lien Notes due 2017	$	491,709	$	531,875	$	490,517	$	552,500
8.375% Senior Notes due 2018	235,129		237,506		234,853		265,886
6.125% Senior Unsecured Notes due 2022	500,000		503,125		500,000		533,125
5.375% Senior Unsecured Notes due 2021	600,000		574,500		—		—
Term Loan A	55,000		54,753		263,875		262,556
Term Loan B	398,000		394,178		580,850		589,125
Deerfield Bank Credit Facility	24,694		24,898		19,950		19,950

Not included in the table above are the fair values and carrying values for our 3.0% Notes, which as discussed further in Note 4.  Notes Payable and Commercial Bank Financing, were converted and settled in cash in October 2013 for $10.5 million. We believe the fair value of 3.0% Notes approximates the carrying value based on discounted cash flows using Level 3 inputs described above, as of December 31, 2012.  The fair values and carrying values of the outstanding amounts under the Cunningham Bank Credit Facility totaling $21.5 million, are also not include in the table above.  The outstanding balance was repaid in full on October 1, 2013.  We believe the fair value approximates the carrying value based on discounted cash flows using Level 2 inputs.

Additionally, Cunningham, one of our consolidated VIEs has investments in marketable securities which are recorded at fair value using Level 1 inputs described above. As of September 30, 2013 and December 31, 2012, $9.0 million and $6.4 million, respectively, were included in other assets in our consolidated balance sheets.

The carrying amounts of working capital items such as, cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to their short-term nature.

26

9.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 5.375% Notes, the 6.125% Notes, the 8.375% Notes, the 9.25% Notes, and 6.375% Notes (issued October 2013). Our Class A Common Stock, Class B Common Stock, and the 3.0% Notes, as of September 30, 2013, were obligations or securities of SBG and not obligations or securities of STG.  SBG is a guarantor under the Bank Credit Agreement, the 5.375% Notes, the 6.125% Notes, the 9.25% Notes, the 8.375% Notes, and 6.375% Notes (issued in October 2013).  As of September 30, 2013, our consolidated total debt of $2,475 million included $2,380.6 million of debt related to STG and its subsidiaries of which SBG guaranteed $2,338.4 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 consolidating balance sheets, consolidating statements of operations and comprehensive income and consolidating 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.

27

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—	$	194,539	$	16,911	$	17,544		$	—		$	228,994
Accounts and other receivables	86		1,733		239,971		9,620			(1,356		)	250,054
Other current assets	2,487		8,538		81,134		12,446			(1,971		)	102,634
Assets held for sale	—		—		5,900		—			—			5,900
Total current assets	2,573		204,810		343,916		39,610			(3,327		)	587,582
Property and equipment, net	5,284		11,008		380,973		123,359			(7,242		)	513,382
Investment in consolidated subsidiaries	378,899		2,098,135		2,783		—			(2,479,817		)	—
Restricted cash — long-term	—		38,933		222		2,102			—			41,257
Other long-term assets	80,396		474,993		78,519		118,092			(492,074		)	259,926
Total other long-term assets	459,295		2,612,061		81,524		120,194			(2,971,891		)	301,183
Goodwill and other intangible assets	—		—		2,113,626		176,899			(74,999		)	2,215,526
Total assets	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	(3,057,459	)	$	3,617,673
Accounts payable and accrued liabilities	$	200	$	89,341	$	111,616	$	14,354		$	(320	)	$	215,191
Current portion of long-term debt	536		4,665		967		10,454			—			16,622
Current portion of affiliate long-term debt	1,254		—		1,017		720			(720		)	2,271
Other current liabilities	938		—		95,595		10,070			24			106,627
Total current liabilities	2,928		94,006		209,195		35,598			(1,016		)	340,711
Long-term debt	6,076		2,275,837		35,965		118,508			—			2,436,386
Affiliate long-term debt	5,306		—		14,314		283,097			(283,098		)	19,619
Other liabilities	44,321		28,381		563,579		110,021			(341,583		)	404,719
Total liabilities	58,631		2,398,224		823,053		547,224			(625,697		)	3,201,435
Total Sinclair Broadcast Group equity (deficit)	408,521		429,655		2,096,986		(94,879		)	(2,431,762		)	408,521
Noncontrolling interests in consolidated subsidiaries	—		—		—		7,717			—			7,717
Total liabilities and equity (deficit)	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	(3,057,459	)	$	3,617,673

28

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(in thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	7,230		$	199	$	15,436		$	—		$	22,865
Accounts and other receivables	152			907			175,837		7,622			(622		)	183,896
Other current assets	2,821			2,342			56,522		9,028			(3,383		)	67,330
Assets held for sale	—			—			30,357		—			—			30,357
Total current assets	2,973			10,479			262,915		32,086			(4,005		)	304,448
Property and equipment, net	6,315			8,938			321,873		113,454			(10,867		)	439,713
Investment in consolidated subsidiaries	—			1,636,504			1,956		—			(1,638,460		)	—
Restricted cash — long term	—			2			223		—			—			225
Other long-term assets	84,055			375,687			60,114		112,757			(429,862		)	202,751
Total other long-term assets	84,055			2,012,193			62,293		112,757			(2,068,322		)	202,976
Goodwill and other intangible assets	—			—			1,706,646		153,961			(78,047		)	1,782,560
Total assets	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697
Accounts payable and accrued liabilities	$	326		$	61,165		$	83,049	$	9,379		$	(102	)	$	153,817
Current portion of long-term debt	483			31,113			800		15,226			—			47,622
Current portion of affiliate long-term debt	1,102			—			602		433			(433		)	1,704
Other current liabilities	—			—			96,288		8,871			(3,099		)	102,060
Liabilities held for sale	—			—			2,397		—			—			2,397
Total current liabilities	1,911			92,278			183,136		33,909			(3,634		)	307,600
Long-term debt	12,502			2,088,586			36,705		73,073			—			2,210,866
Affiliate long-term debt	6,303			—			6,884		267,521			(267,521		)	13,187
Dividends in excess of investment in consolidated subsidiaries	178,869			—			—		—			(178,869		)	—
Other liabilities	10,708			2,509			491,845		103,007			(309,972		)	298,097
Total liabilities	210,293			2,183,373			718,570		477,510			(759,996		)	2,829,750
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(116,950		)	(151,763		)	1,635,157		(82,149		)	(1,401,245		)	(116,950		)
Noncontrolling interests in consolidated subsidiaries	—			—			—		16,897			—			16,897
Total liabilities and equity (deficit)	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697

29

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	319,767		$	32,970		$	(14,093	)	$	338,644
Program and production	—			112			99,186			13,870			(14,229		)	98,939
Selling, general and administrative	901			14,712			64,300			2,386			(75		)	82,224
Depreciation, amortization and other operating expenses	348			629			68,820			19,143			(4,307		)	84,633
Total operating expenses	1,249			15,453			232,306			35,399			(18,611		)	265,796
Operating (loss) income	(1,249		)	(15,453		)	87,461			(2,429		)	4,518			72,848
Equity in earnings of consolidated subsidiaries	40,547			55,128			60			—			(95,735		)	—
Interest expense	(203		)	(37,123		)	(1,269		)	(6,538		)	5,266			(39,867		)
Other income (expense)	996			6,772			(6,710		)	1,085			(84		)	2,059
Total other income (expense)	41,340			24,777			(7,919		)	(5,453		)	(90,553		)	(37,808		)
Income tax benefit (provision)	(3,749		)	16,667			(22,236		)	929			3,900			(4,489		)
Income from discontinued operations	—			6,108			(8		)	—			—			6,100
Net income (loss)	36,342			32,099			57,298			(6,953		)	(82,135		)	36,651
Net income attributable to the noncontrolling interests	—			—			—			(309		)	—			(309		)
Net income (loss) attributable to Sinclair Broadcast Group	$	36,342		$	32,099		$	57,298		$	(7,262	)	$	(82,135	)	$	36,342
Comprehensive income (loss)	$	36,613		$	32,061		$	57,298		$	(7,262	)	$	(82,097	)	$	36,613

30

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	246,531		$	14,364		$	(2,181	)	$	258,714
Program and production	—			278			63,777			(1		)	(2,349		)	61,705
Selling, general and administrative	746			13,157			36,720			908			(76		)	51,455
Depreciation, amortization and other operating expenses	382			618			53,819			12,508			(171		)	67,156
Total operating expenses	1,128			14,053			154,316			13,415			(2,596		)	180,316
Operating (loss) income	(1,128		)	(14,053		)	92,215			949			415			78,398
Equity in earnings of consolidated subsidiaries	26,435			50,171			—			—			(76,606		)	—
Interest expense	(341		)	(32,560		)	(1,291		)	(6,352		)	5,250			(35,294		)
Other income (expense)	869			43			40			1,597			(83		)	2,466
Total other income (expense)	26,963			17,654			(1,251		)	(4,755		)	(71,439		)	(32,828		)
Income tax benefit (provision)	326			19,872			(39,396		)	105			—			(19,093		)
(Loss) income from discontinued operations	84			(68		)	(141		)	—			—			(125		)
Net income (loss)	26,245			23,405			51,427			(3,701		)	(71,024		)	26,352
Net income attributable to the noncontrolling interests	—			—			—			(107		)	—			(107		)
Net income (loss) attributable to Sinclair Broadcast Group	$	26,245		$	23,405		$	51,427		$	(3,808	)	$	(71,024	)	$	26,245
Comprehensive income (loss)	$	26,409		$	23,462		$	51,427		$	(3,808	)	$	(71,081	)	$	26,409

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	887,489		$	90,402		$	(42,475	)	$	935,416
Program and production	—			207			269,360			28,489			(32,990		)	265,066
Selling, general and administrative	2,679			34,840			167,654			14,627			(9,644		)	210,156
Depreciation, amortization and other operating expenses	1,038			1,558			186,926			50,691			(803		)	239,410
Total operating expenses	3,717			36,605			623,940			93,801			(43,437		)	714,632
Operating (loss) income	(3,717		)	(36,605		)	263,549			(3,405		)	962			220,784
Equity in earnings of consolidated subsidiaries	76,623			164,370			—			—			(240,993		)	—
Interest expense	(903		)	(115,115		)	(3,607		)	(19,027		)	15,623			(123,029		)
Other income (expense)	3,029			3,141			(19,433		)	4,990			(6,468		)	(14,741		)
Total other income (expense)	78,749			52,396			(23,040		)	(14,037		)	(231,838		)	(137,770		)
Income tax (provision) benefit	(3,867		)	47,645			(73,267		)	2,597			3,900			(22,992		)
Income from discontinued operations	—			11,063			495			—			—			11,558
Net income (loss)	71,165			74,499			167,737			(14,845		)	(226,976		)	71,580
Net income attributable to the noncontrolling interests	—			—			—			(415		)	—			(415		)
Net income (loss) attributable to Sinclair Broadcast Group	$	71,165		$	74,499		$	167,737		$	(15,260	)	$	(226,976	)	$	71,165
Comprehensive income (loss)	$	71,464		$	74,383		$	167,737		$	(15,260	)	$	(226,860	)	$	71,464

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	694,520		$	44,179		$	(6,537	)	$	732,162
Program and production	—			291			190,169			158			(6,520		)	184,098
Selling, general and administrative	2,117			38,720			102,075			2,999			(283		)	145,628
Depreciation, amortization and other operating expenses	1,148			1,282			150,636			39,636			(447		)	192,255
Total operating expenses	3,265			40,293			442,880			42,793			(7,250		)	521,981
Operating (loss) income	(3,265		)	(40,293		)	251,640			1,386			713			210,181
Equity in earnings of consolidated subsidiaries	86,991			156,249			—			—			(243,240		)	—
Interest expense	(999		)	(84,277		)	(3,695		)	(18,651		)	15,621			(92,001		)
Other income (expense)	2,192			53			85			7,751			(340		)	9,741
Total other income (expense)	88,184			72,025			(3,610		)	(10,900		)	(227,959		)	(82,260		)
Income tax benefit (provision)	745			38,414			(88,485		)	7,141			—			(42,185		)
(Loss) income from discontinued operations	—			(202		)	24			—			—			(178		)
Net income (loss)	85,664			69,944			159,569			(2,373		)	(227,246		)	85,558
Net loss attributable to the noncontrolling interests	—			—			—			106			—			106
Net income (loss) attributable to Sinclair Broadcast Group	$	85,664		$	69,944		$	159,569		$	(2,267	)	$	(227,246	)	$	85,664
Comprehensive income	$	85,804		$	70,190		$	159,569		$	(2,267	)	$	(227,492	)	$	85,804

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CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(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	$	(3,042	)	$	(66,985	)	$	208,126		$	(816	)	$	13,356		$	150,639
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,253		)	(21,109		)	(5,414		)	—			(28,776		)
Payments for acquisitions of television stations	—			—			(495,440		)	—			—			(495,440		)
Payments for acquisitions in other operating divisions	—			—			—			(4,650		)	—			(4,650		)
Purchase of alarm monitoring contracts	—			—			1,114			(13,042		)	—			(11,928		)
Proceeds from sale of broadcast assets	—			—			27,992			—			—			27,992
Decrease in restricted cash	—			(38,930		)	—			(2,102		)	—			(41,032		)
Other, net	1,648			—			4,454			1,898			(10,908		)	(2,908		)
Net cash flows (used in) from investing activities	1,648			(41,183		)	(482,989		)	(23,310		)	(10,908		)	(556,742		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			1,146,789			—			52,026			—			1,198,815
Repayments of notes payable, commercial bank financing and capital leases	(234		)	(985,755		)	(802		)	(11,294		)	—			(998,085		)
Proceeds from the sale of common stock	472,400			—			—			—			—			472,400
Dividends paid on Class A and Class B Common Stock	(41,938		)	—			235			—			(235		)	(41,938		)
Increase (decrease) in intercompany payables	(429,664		)	154,648			292,696			(4,549		)	(13,131		)	—
Other, net	830			(20,205		)	(554		)	(9,949		)	10,918			(18,960		)
Net cash flows (used in) from financing activities	1,394			295,477			291,575			26,234			(2,448		)	612,232
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			187,309			16,712			2,108			—			206,129
CASH AND CASH EQUIVALENTS, beginning of period	—			7,230			199			15,436			—			22,865
CASH AND CASH EQUIVALENTS, end of period	$	—		$	194,539		$	16,911		$	17,544		$	—		$	228,994

34

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(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	$	(460	)	$	(75,408	)	$	228,829		$	9,428		$	915		$	163,304
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,458		)	(25,624		)	(2,075		)	—			(30,157		)
Payments for acquisitions of television stations	—			—			(590,917		)	—			—			(590,917		)
Purchase of alarm monitoring contracts	—			—			—			(7,343		)	—			(7,343		)
Decrease in restricted cash	—			15,849			—			—			—			15,849
Other, net	740			—			63			2,502			—			3,305
Net cash flows (used in) from investing activities	740			13,391			(616,478		)	(6,916		)	—			(609,263		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			596,275			—			19.432			—			615,707
Repayments of notes payable, commercial bank financing and capital leases	(308		)	(79,077		)	(458		)	(16,002		)	—			(95,845		)
Dividends paid on Class A and Class B Common Stock	(31,646		)	—			—			—			401			(31,245		)
Increase (decrease) in intercompany payables	32,087			(435,595		)	389,771			15,053			(1,316		)	—
Other, net	(413		)	(8,364		)	(1,489		)	(734		)	—			(11,000		)
Net cash flows (used in) from financing activities	(280		)	73,239			387,824			17,749			(915		)	477,617
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			11,222			175			20,261			—			31,658
CASH AND CASH EQUIVALENTS, beginning of period	—			188			313			12,466			—			12,967
CASH AND CASH EQUIVALENTS, end of period	$	—		$	11,410		$	488		$	32,727		$	—		$	44,625

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This report includes or incorporates forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act) and the U.S. Private Securities Litigation Reform Act of 1995.  We have based these forward-looking statements on our current expectations and projections about future events.  These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things, the following risks:

General risks

·the impact of changes in national and regional economies and credit and capital markets;

·consumer confidence;

·the potential impact of changes in tax law;

·the activities of our competitors;

·terrorist acts of violence or war and other geopolitical events;

·natural disasters that impact our advertisers and our stations;

Industry risks

·the business conditions of our advertisers particularly in the automotive and service industries;

·competition with other broadcast television stations, radio stations, multi-channel video programming distributors (MVPDs), internet and broadband content providers and other print and media outlets serving in the same markets;

·availability and cost of programming and the continued volatility of networks and syndicators that provide us with programming content;

·the effects of the Federal Communications Commission’s (FCC’s) National Broadband Plan and the auctioning and potential reallocation of our broadcasting spectrum;

·the effect of the proposal from the FCC affecting the television station ownership rules, including the elimination of the available discount to apply to UHF stations versus VHF stations (the UHF Discount), when determining the maximum national audience reach of 39%;

·the effects of governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations, indecency regulations, retransmission fee regulations and political or other advertising restrictions;

·labor disputes and legislation and other union activity associated with film, acting, writing and other guilds and professional sports leagues;

·the broadcasting community’s ability to develop a viable mobile digital broadcast television (mobile DTV) strategy and platform and the consumer’s appetite for mobile television;

·the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast signals;

·the impact of reverse network compensation payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;

·the effects of new ratings system technologies including “people meters” and “set-top boxes,” and the ability of such technologies to be a reliable standard that can be used by advertisers;

·the impact of new FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;

·changes in the makeup of the population in the areas where stations are located;

Risks specific to us

·the effectiveness of our management;

·our ability to attract and maintain local and national advertising;

·our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;

·our ability to successfully renegotiate retransmission consent agreements;

·our ability to renew our FCC licenses;

·our ability to obtain FCC approval for the purchase of any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;

·our ability to successfully integrate any acquired businesses;

·our ability to maintain our affiliation and programming service agreements with our networks and program service

36

providers and at renewal, to successfully negotiate these agreements with favorable terms;

·our ability to effectively respond to technology affecting our industry and to increasing competition from other media providers;

·the popularity of syndicated programming we purchase and network programming that we air;

·the strength of ratings for our local news broadcasts including our news sharing arrangements;

·the successful execution of our multi-channel broadcasting initiatives including mobile DTV;

·our ability to consummate planned acquisitions or to achieve expected synergies; and

·the results of prior year tax audits by taxing authorities.

Other matters set forth in this report and other reports filed with the Securities and Exchange Commission, including the Risk Factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012 may also cause actual results in the future to differ materially from those described in the forward-looking statements.  However, additional factors and risks not currently known to us or that we currently deem immaterial may also cause actual results in the future to differ materially from those described in the forward-looking statements.  You are cautioned not to place undue reliance on any forward-looking statements, which speaks only as of the date on which it is made.  We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this report might not occur.

The following table sets forth certain operating data for the periods presented:

STATEMENTS OF OPERATIONS DATA

(in thousands, except for per share data) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Statement of Operations Data:
Net broadcast revenues (a)	$	303,028		$	225,023		$	835,223		$	633,493
Revenues realized from station barter arrangements	20,653			21,179			60,930			60,060
Other operating divisions revenues	14,963			12,512			39,263			38,609
Total revenues	338,644			258,714			935,416			732,162
Station production expenses	98,939			61,705			265,066			184,098
Station selling, general and administrative expenses	66,115			43,169			171,350			120,462
Expenses recognized from station barter arrangements	18,082			19,300			53,478			55,119
Amortization of program contract costs and net realizable value adjustments	19,229			14,296			56,746			43,565
Depreciation and amortization expenses (b)	17,408			12,626			33,351			34,031
Other operating divisions expenses	12,746			10,372			47,108			33,165
Corporate general and administrative expenses	16,109			8,286			38,806			25,166
Amortization of definite-lived intangible assets	17,168			10,562			48,727			26,375
Operating income	72,848			78,398			220,784			210,181
Interest expense and amortization of debt discount and deferred financing costs	(39,867		)	(35,294		)	(123,029		)	(92,001		)
Loss from extinguishment of debt	—			—			(16,283		)	(335		)
Income from equity and cost method investees	1,571			1,919			115			8,343
Other income, net	488			547			1,427			1,733
Income from continuing operations before income taxes	35,040			45,570			83,014			127,921
Income tax provision	(4,489		)	(19,093		)	(22,992		)	(42,185		)
Income from continuing operations	30,551			26,477			60,022			85,736
Income (loss) from discontinued operations, net of taxes	6,100			(125		)	11,558			(178		)
Net income	36,651			26,352			71,580			85,558
Net (income) loss attributable to the noncontrolling interests	(309		)	(107		)	(415		)	106
Net income attributable to Sinclair Broadcast Group	$	36,342		$	26,245		$	71,165		$	85,664
Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
Basic earnings per share from continuing operations	$	0.30		$	0.33		$	0.66		$	1.06
Basic earnings per share	$	0.37		$	0.33		$	0.78		$	1.06
Diluted earnings per share from continuing operations	$	0.30		$	0.33		$	0.65		$	1.06
Diluted earnings per share	$	0.36		$	0.32		$	0.78		$	1.05

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Balance Sheet Data:	September 30, 2013		December 31, 2012
Cash and cash equivalents	$	228,994	$	22,865
Total assets	$	3,617,673	$	2,729,697
Total debt (c)	$	2,474,898	$	2,273,379
Total equity (deficit)	$	416,238	$	(100,053	)

(a)Net broadcast revenues are defined as broadcast revenues, net of agency commissions.

(b)Depreciation and amortization includes depreciation and amortization of property and equipment and amortization of definite-lived intangible assets and other assets.

(c)Total debt is defined as notes payable, capital leases and commercial bank financing, including the current and long-term portions.

The following Management’s Discussion and Analysis provides qualitative and quantitative information about our financial performance and condition and should be read in conjunction with our consolidated financial statements and the accompanying notes to those statements.  This discussion consists of the following sections:

Executive Overview — financial events since June 30, 2013.

Results of Operations — an analysis of our revenues and expenses for the three and nine months ended September 30, 2013 and 2012, including comparisons between quarters and expectations for the three months ended December 31, 2013.

Liquidity and Capital Resources — a discussion of our primary sources of liquidity, an analysis of our cash flows from or used in operating activities, investing activities and financing activities and an update of our debt refinancings during the three and nine months ended September 30, 2013.

EXECUTIVE OVERVIEW

Third Quarter 2013 Events

·In July 2013, we entered into a definitive agreement to purchase the stock of Perpetual Corporation and the equity interest of Charleston Television, LLC, both owned and controlled by the Allbritton family (Allbritton), for an aggregate purchase price of $985.0 million. The Allbritton stations consist of seven ABC network affiliated television stations and NewsChannel 8, a 24-hour cable/satellite news network covering the Washington D.C. metropolitan area. The transaction is expected to close late in the first quarter of 2014 or early in the second quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions. We expect to fund the purchase price at closing through additional borrowings under our bank credit facility.  Additionally, to comply with FCC local television ownership rules, we expect to sell the license and certain related assets of existing stations in Birmingham, AL — WABM (MNT) and WTTO (CW), Harrisburg/Lancaster/Lebanon/York, PA — WHP (CBS), and Charleston, SC — WMMP (MNT) and to provide sales and other non-programming support services to each of these stations pursuant to customary shared services and joint sales agreements.

·In August 2013, our Board of Directors declared a quarterly dividend of $0.15 per share, payable on September 13, 2013, to the holders of record at the close of business on August 30, 2013.

·Effective August 8, 2013, we completed the merger with Fisher Communications, Inc. for an acquisition price of $373.2 million. Fisher owned twenty television stations in eight markets, plus two simulcasts, and four radio stations in the Seattle market.

·In September 2013, we entered into a definitive agreement to purchase the broadcast assets of eight television stations owned by New Age Media located in three markets, for an aggregate purchase price of $90.0 million. The transaction is expected to close in the first quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions.  We expect to fund the purchase price through cash on hand or a delayed draw under our bank credit agreement. Additionally, Wilkes/Barre/Scranton, PA — WSWB, Tallahassee, FL — WTLH and WTLF and Gainesville, FL — WMBW will be purchased by a  third party; we will continue to provide sales and other non-programming support services to each of these stations, pursuant to customary share services and joint sales agreements.

·Effective September 30, 2013, we completed the acquisition of two stations (KMEG and KPTH in Sioux City, IA) for $17.3 million plus $0.7 million of working capital adjustments. The acquired stations were part of a definitive agreement entered into with TTBG in June 2013.

·In September 2013, 100% of the outstanding 4.875% Notes, representing principal of $5.7 million, were converted into 388,632 shares of Class A Common Stock, as permitted under the indenture.

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Other Events

·In October 2013, we completed the purchase of certain stock and assets of four television stations owned by TTBG, LLC for $98.0 million and will provide sales and other services to two stations.

·In October 2013, we acquired the stock of the entity which owns KDBC (FOX) in El Paso, Texas for $21.0 million.  A third party continues to provide sales and other related services pursuant to JSA agreement.

·In October 2013, we completed the purchase of the non-license assets of WPFO (FOX) in Portland, Maine for $13.6 million and will provide sales and other services to the station.

·In October 2013, we issued $350.0 million aggregate principal amount of 6.375% Senior Unsecured Notes, due 2021 (the 6.375% Notes). The 6.375% Notes were priced at 100% of their par value and will bear interest at a rate of 6.375% per annum payable semi-annually on May 1 and November 1, commencing May 1, 2014. The Notes mature on November 1, 2021 and are guaranteed by Sinclair and certain of its subsidiaries. See Note 4 Notes Payable and Commercial Bank Financing for more information.

·In October 2013, we used the proceeds from the issuance of the 6.375% Notes to redeem the $500 million aggregate principal amount of 9.25% Notes.

·In October 2013, we amended our bank credit agreement (October Amendment). Pursuant to the October Amendment, we raised an additional $450 million of incremental loans, which consisted of $200 million in incremental delayed draw term loan A loans, maturing April 2018 and priced at LIBOR plus 2.25%; and $250.0 million in incremental term loan B loans, maturing April 2020 and priced at LIBOR plus 2.25% with a LIBOR floor of 0.75%. In addition, we obtained an additional $57.5 million of capacity under our revolving line of credit maturing April 2018. The terms loans are expected to be used to fund acquisitions and for general corporate purposes. We also amended certain other terms of our Bank Credit Agreement. See Note 4. Notes Payable and Commercial Bank Financing for more information.

·In October 2013, 100% of the outstanding 3.0% Notes, representing principal of $5.4 million, were converted and settled fully in cash of $10.5 million, as permitted under the indenture.

·In November 2013, our Board of Directors declared a quarterly dividend of $0.15 per share, payable on December 13, 2013, to the holders of record at the close of business on November 29, 2013.

RESULTS OF OPERATIONS

In general, this discussion is related to the results of our continuing operations, except for discussions regarding our cash flows, which also include the results of our discontinued operations. The results of the acquired stations from Newport Television (Newport) as of December 1, 2012 (acquisition date), Cox Media Group (Cox) as of May 1, 2013 (acquisition date), Fisher Communications (Fisher) as of August 8, 2013, and six other television stations during the year ended 2012 and 2013 are included in our results of our continuing operations for the three months ended September 30, 2013.  Our results of our continuing operations for the nine months ended September 30, 2013 include the acquisitions listed above and Freedom as of April 1, 2012 (acquisition date).  We determined that the operating results of WLAJ-TV and WLWC-TV’s should be classified as discontinued operations and therefore the results are not included in our consolidated results of continuing operations for the three and nine months ended September 30, 2013 and 2012.  Unless otherwise indicated, references in this discussion and analysis to the second quarter of 2013 and 2012 refer to the three months ended September 30, 2013 and 2012, respectively.  Additionally, any references to the first, third or fourth quarter are to the three months ended March 31, September 30, and December 31, respectively, for the year being discussed.  We have one reportable segment, “broadcast” that is disclosed separately from our other operating divisions and corporate activities.

SEASONALITY/CYCLICALITY

Our operating results are usually subject to seasonal fluctuations.  Usually, the second and fourth quarter operating results are higher than first and third quarters’ because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.

Our operating results are usually subject to fluctuations from political advertising.  In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections.  Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election.

39

BROADCAST SEGMENT

Broadcast Revenue

The following table presents our revenues from continuing operations, net of agency commissions, for the periods presented (in millions):

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2013		2012		Percent Change	2013		2012		Percent Change
Local revenues:
Non-political	$	238.1	$	152.8	55.8%	$	658.1	$	463.2	42.1%
Political	0.2		2.7		(a)	0.5		5.1		(a)
Total local	238.3		155.5		53.2%	658.6		468.3		40.6%
National revenues:
Non-political	62.2		44.4		40.1%	172.0		127.5		34.9%
Political	2.5		25.1		(a)	4.6		37.7		(a)
Total national	64.7		69.5		(6.9)%	176.6		165.2		6.9%
Total net broadcast revenues	$	303.3	$	225.0	34.7%	$	835.2	$	633.5	31.8%

(a)Political revenue is not comparable from year to year due to cyclicality of elections.  See Political Revenues below for more information.

Net broadcast revenues.  Net broadcast revenues increased $78.0 million when comparing the third quarter 2013 to the same period in 2012, of which $82.5 million was related to stations acquired after the third quarter of 2012. The remaining decrease is primarily the result of lower political revenues since political revenue is typically higher in election years, such as 2012.  These decreases were partially offset by an increase in retransmission revenues from multichannel video programming distributors (MVPD), and advertising revenues in automotive, food / grocery, media and service sectors. Excluding the stations acquired after the third quarter of 2012, automotive, which typically is our largest category, represented 25.8% of net time sales for the three months ended September 30, 2013.  Net broadcast revenues increased $201.7 million when compared to the nine months ended September 30, 2013 to the same period in 2012, of which $199.6 million was related to acquired stations not included in the same period in 2012. The remaining increase for the nine month period is primarily due to an increase in retransmission revenues from MVPDs and advertising revenues in automotive, food / grocery, and media sectors. These increases were partially offset by decreases in the political, paid programming, school and restaurant sectors. Excluding the stations acquired after the third quarter of 2012, automotive, which typically is our largest category, represented 24.6% of net time sales for the nine months ended September 30, 2013.

From a network affiliation or program service arrangement perspective, the following table sets forth our affiliate percentages of net time sales for the periods presented:

	# of	Percent of Net Time Sales for the Three months ended September 30,		Net Time Sales Percent	Percent of Net Time Sales for the Nine months ended September 30,		Net Time Sales Percent
	Stations (a)	2013	2012	Change	2013	2012	Change
FOX	33	30.7%	35.2%	4.3%	32.1%	38.1%	2.7%
ABC	13	19.6%	20.2%	16.3%	17.7%	19.2%	12.3%
MyNetworkTV	21	11.3%	13.3%	1.3%	11.2%	13.4%	1.6%
The CW	16	10.3%	11.2%	9.9%	11.2%	11.6%	17.8%
CBS	21	20.1%	19.0%	26.8%	21.4%	16.5%	58.2%
NBC	8	6.7%	0.6%	1,212.0%	5.5%	0.5%	1,152.8%
Digital	(b)	1.2%	0.5%	197.7%	0.7%	0.4%	102.4%
Other	7	0.1%	0.1%	(3.3)%	0.2%	0.1%	181.7%
Total	119

(a)During the nine months ended September 30, 2013, we acquired or entered into outsourcing agreements to provide certain non-programming related sales, operational and administrative services to 30 stations with the following network affiliation or program service arrangements: FOX (2 stations in the second quarter, and 3 in the third quarter), NBC (2 stations in the second quarter and 3 in the third quarter), MyNetworkTV (2 stations in the second quarter), CBS (10 stations in the third quarter), Univision (5 stations in the third quarter), ABC (2 stations in the third quarter), and the CW (one station in the third quarter). During 2012, we acquired or entered into outsourcing agreements to provide certain non-programming related sales, operational and administrative services to 20 stations with the following network affiliation or program service arrangements: CBS (five stations in the second quarter and two stations in the fourth quarter), NBC (two stations in the fourth quarter), FOX (four stations in the fourth quarter), ABC (one station in the second quarter and one station in the fourth quarter), CW (one station in the second quarter and two stations in the fourth quarter), MyNetworkTV (one station in the fourth quarter), Other (one station in the fourth quarter). We reclassified the results of operations of WLAJ-TV, an ABC station acquired in the second quarter and WLWC-TV, a CW station

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acquired in the first quarter, as discontinued operations as discussed in Note 1. Summary of Significant Accounting Policies and therefore the net time sales of WLAJ-TV and WLWC-TV are not included in the percentages above and are excluded from the number of stations.

(b)We broadcast programming from network affiliations or program service arrangements with CBS (rebroadcasted content from other primary channels within the same markets), The CW, MyNetworkTV, This TV, ME TV, Weather Radar, The Weather Authority Network, Retro TV, Live Well Network, Antenna TV, Bounce Network, The Country Network, Azteca, Telemundo and Estrella on additional channels through our stations’ second and third digital signals.

Political Revenues.  Political revenues decreased by $25.1 million to $2.7 million for the third quarter 2013 when compared to the same period in 2012.  For the nine months ended September 30, 2013, political revenues decreased by $37.6 million to $5.1 million when compared to the same period in 2012.  Political revenues are typically higher in election years such as 2012.

Local Revenues.  Excluding political revenues, our local broadcast revenues, which include local times sales, retransmission revenues and other local revenues, were up $85.3 million for the third quarter 2013 when compared to the same period in 2012, of which $63.8 million was related to the stations acquired after the third quarter of 2012. Excluding political revenues, our local broadcast revenues were up $194.9 million for the nine months ended September 30, 2013 compared to the same period in 2012, of which $155.6 million related to the acquired stations not included in the same period in 2012. The remaining increase, for both the three and nine month periods, is primarily due to an increase in retransmission revenues from MVPDs. These increases were partially offset by a decrease in advertising revenues, excluding stations acquired after the first quarter of 2012, due to a decline in advertising revenues from the restaurants and direct response sectors partially offset by an increase in the automotive, fast food, and furniture sectors and a change in networks for the Super Bowl programming from NBC to CBS.

National Revenues.  Excluding political revenues, our national broadcast revenues, which include national time sales and other national revenues, were up $17.8 million for the third quarter 2013 when compared to the same period in 2012, of which $17.5 million was related to the stations acquired after the third quarter of 2012. For the nine months ended September 30, 2013, when compared to the same period in 2012, our national broadcast revenues, excluding political revenues, were up $44.5, of which $42.1 million related to acquired stations not included in the same period in 2012.  Advertising revenues, excluding political and excluding stations acquired after the first quarter of 2012, decreased in the fast food, paid programming and telecommunication sectors and increased in the automotive, grocery and media sectors.

Broadcast Expenses

The following table presents our significant expense categories in our broadcast segment for the periods presented (in millions):

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
					Percent Change					Percent Change
	2013		2012		Increase	2013		2012		Increase
Station production expenses	$	98.9	$	61.7	60.3%	$	265.1	$	184.1	44.0%
Station selling, general and administrative expenses	$	66.1	$	43.2	53.0%	$	171.4	$	120.5	42.3%
Amortization of program contract costs and net realizable value adjustments	$	19.2	$	14.3	34.3%	$	56.7	$	43.6	30.0%
Corporate general and administrative expenses	$	14.6	$	7.3	100.0%	$	35.0	$	21.9	59.8%
Depreciation and amortization expenses	$	32.4	$	21.4	51.4%	$	89.8	$	54.8	63.9%

Station production expenses.  Station production expenses increased $37.2 million during the third quarter of 2013 as compared to the same period in 2012, of which $28.3 million related to the stations acquired after the third quarter of 2012.  Station production expenses increased $81.0 million during the nine months ended September 30, 2013 as compared to the same period in 2012, of which $64.7 million related to stations not included in the same period in 2012. The remaining increases for both the three and nine month periods are primarily due to an increase in fees pursuant to network affiliation agreements, partially offset by a reduction in rating service fees.

Station selling, general and administrative expense.  Station selling, general and administrative expenses increased $22.9 million during the third quarter 2013 compared to the same period in 2012, of which $21.4 million related to the stations acquired after the third quarter of 2012. The remaining increase for the three month period is primarily due to an increase in compensation, health insurance, and franchise tax expense, and a settlement payment upon termination of a contract with Inergize that we had assumed in the acquisition of Newport stations. Station selling, general and administrative expenses increased $50.9 million for the nine months ended September 30, 2013 compared to the same period in 2012, of which $47.0 million related to the acquired stations not included in the same period in 2012.  The remaining increase for the nine month period is primarily due to an increase in compensation and health insurance.

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Amortization of program contract costs and net realizable value adjustments.  The amortization of program contract costs increased $4.9 million during the third quarter of 2013 compared to the same period in 2012, of which $3.7 million related to stations acquired after the third quarter of 2012.  The amortization of program contract costs increased $13.1 million for the nine months ended September 30, 2013 compared to the same period in 2012, of which $9.7 million related to the acquired stations not included in the same period in 2012. The remaining increase is due to higher programming costs.

Corporate general and administrative expenses.  See explanation under Corporate and Unallocated Expenses.

Depreciation and Amortization expenses.  Depreciation of property and equipment and amortization of definite-lived intangibles and other assets increased $11.0 million during the third quarter of 2013 compared to the same period in 2012, of which $13.5 million related to stations acquired after the third quarter of 2012.  Depreciation of property and equipment and amortization of definite-lived intangibles and other assets increased $35.0 million for the nine months ended September 30, 2013 compared to the same period in 2012, of which $36.2 million related to acquired stations not included in the same period in 2012.  The remaining decreases for both the three and nine month periods are due to assets becoming fully depreciated and amortized.

OTHER OPERATING DIVISIONS

Triangle Sign & Service, LLC (Triangle), a sign designer / fabricator, Alarm Funding Associates, LLC (Alarm Funding), a regional security alarm operating and bulk acquisition company, real estate ventures and other nominal businesses make up our other operating divisions.  Revenues for our other operating divisions increased $2.5 million to $15.0 million during the third quarter 2013 compared to $12.5 million during the same period in 2012.  For the nine months ended September 30, 2013, revenues for our other operating divisions increased $0.7 million to $39.3 million compared to $38.6 million during the same period in 2012.  Expenses of our other operating divisions including operating expenses, depreciation and amortization and applicable other income (expense) items such as interest expense, increased $2.3 million to $12.7 million during the third quarter 2013 compared to $10.4 million during the same period in 2012.  For the nine months ended September 30, 2013, these expenses increased $0.2 million to $33.4 million compared to $33.2 million during the same period in 2012.  The increases in both revenue and expenses relate primarily to the increases in revenue of several investments in other operating divisions.

Income from Equity and Cost Method Investments.  Results of our equity and cost method investments in private investment funds and real estate ventures are included in income from equity and cost method investments in our consolidated statements of operations, within other operating divisions.  During the three months ended September 30, 2013, we recorded income of $1.0 million related to our real estate ventures and income of $0.6 million related to certain private investment funds.  During the nine months ended September 30, 2012, we recorded a loss of $1.3 million related to our real estate ventures and income of $1.4 million related to certain private investment funds, partially offset by a $0.4 million impairment charge related to one of the investments within one of the funds.

CORPORATE AND UNALLOCATED EXPENSES

	For the Three Months Ended September 30,							For the Nine Months Ended September 30,
							Percent Change (Increase/							Percent Change (Increase/
	2013			2012			(Decrease))	2013			2012			(Decrease))
Corporate general and administrative expenses	$	0.9		$	0.7		28.6%	$	2.7		$	2.1		28.6%
Interest expense	$	39.0		$	34.3		13.7%	$	120.6		$	89.5		34.7%
Loss from extinguishment of debt	$	—		$	—		—	$	(16.3	)	$	(0.3	)	nm
Income tax provision	$	(4.5	)	$	(19.1	)	(76.4)%	$	(23.0	)	$	(42.2	)	(45.5)%

nm – not meaningful

Corporate general and administrative expenses.  We allocate most of our corporate general and administrative expenses to the broadcast segment.  The explanation that follows combines the corporate general and administrative expenses found in the Broadcast Segment section with the corporate general and administrative expenses found in this section, Corporate and Unallocated Expenses.  These results exclude general and administrative costs from our other operating divisions which are included in our discussion of expenses in the Other Operating Divisions section.

Corporate general and administrative expenses increased by $7.5 million and $13.6 million for the three and nine months ended September 30, 2013, respectively, when compared to the same periods in 2012.  During the three months ended September 30, 2013, we recorded $4.3 million of one-time severance changes in connection with the Fisher acquisition.  The remaining increases are primarily due to higher stock based compensation, higher salaries and benefits as a result of an increase in headcount related to recent acquisitions, and other acquisition-related costs.

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We expect corporate general and administrative expenses to decrease slightly in the fourth quarter of 2013 compared to third quarter of 2013.

Interest expense.  Interest expense has increased primarily due to the issuance of $500 million of 6.125% Notes, in the fourth quarter of 2012 and the issuance of $600.0 million of 5.375% Notes in the second quarter of 2013 where by proceeds were used to pay down loans issued under our bank credit agreement which currently has a lower variable rate.  See Liquidity and Capital Resources for more information.

Loss from extinguishment of debt. During the nine months ending September 30, 2013 we recognized a loss on extinguishment of debt of $16.3 million related to the amendment and restatement of our Bank Credit Agreement.  During the nine months ended September 30, 2012, we drew down on our incremental borrowing for the Four Points acquisition and wrote off a portion of our deferred financing costs and discount on the Term Loan B, resulting in a loss of $0.3 million from extinguishment of debt.

Income tax (provision) benefit.  The effective tax rate for the three months ended September 30, 2013 including the effects of the noncontrolling interest was a provision of 12.9% as compared to a provision of 42.0% during the same period in 2012.  The effective tax rate for the nine months ended September 30, 2013 including the effects of the noncontrolling interest was a provision of 27.8% as compared to a provision of 33.0% during the same period in 2012.  The decrease in the effective tax rate for the three and nine months ended September 30, 2013 as compared to the same periods in 2012 is primarily due to the following discrete items recorded in three months ended September 30, 2013: 1) a release of a valuation allowance related to state net operating loss (NOL) carryforwards of $5.3 million, net of taxes, due to a law change in a state tax jurisdiction, effective for years beginning after December 31, 2014, which we expect will significantly increase the forecasted future taxable income attributable to that state and result in utilization of the state NOL carryforwards and 2) a $2.2 million adjustment to the income tax provision upon finalization of the 2012 federal income tax return, primarily related to higher than originally projected available income tax deductions.  Additionally, the effective tax rate for the nine months ended September 30, 2012 includes the effect a release of a valuation allowance of $7.7 million related to certain deferred tax assets of Cunningham as the weight of all available evidence supported realization of the deferred tax assets.

As previously discussed above under Note 1. Nature of Operations and Summary of Significant Accounting Policies, during the three months ended September 30, 2013, we reduced our liability for unrecognized tax benefits by $6.1 million related to discontinued operations, as we now believe that it is more likely than not that our previously unrecognized state tax position would be sustained upon review of the state tax authority, based on new information obtained during the period.  Additionally, during the second quarter of 2013, we reduced our liability for unrecognized tax benefits by $5.1 million related to discontinued operations, upon the application of limits under an available state administrative practice exception.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2013, we had $229.0 million in cash and cash equivalent balances and net working capital of approximately $246.9 million.  Cash generated by our operations and borrowing capacity under the Bank Credit Agreement are used as our primary sources of liquidity.  As of September 30, 2013, we had $97.5 million of borrowing capacity available on our Revolving Credit Facility.  During October 2013, the borrowing capacity was increased by $57.5 million to $157.5 million.

In April 2013, we issued $600.0 million of senior unsecured notes with a maturity date of April 1, 2021 that bear interest at a rate of 5.375% per year.  The net proceeds were used to pay down outstanding indebtedness under our bank credit facility including outstanding amounts under the revolving credit facility.

In April 2013, we amended and restated our existing bank credit facility and replaced our existing term loans with a new $500.0 million Term Loan A priced at LIBOR plus 2.25% and due April 2018 and a new $400.0 million Term Loan B priced at LIBOR plus 2.25% with a 0.75% LIBOR floor due April 2020.  We also increased the capacity on our Revolving Credit Facility from $97.5 million to $100.0 million. The net proceeds were used to fund acquisitions and for general corporate purposes. Due to timing related to the closing and funding of the acquisitions, approximately $445.0 million of the new Term Loan A was drawn on a delayed basis on October 1, 2013.

In May 2013, we issued 18.0 million shares of Class A Common Stock for net proceeds of $472.4 million.  The net proceeds were used to fund acquisitions in the third quarter 2013.

In September 2013, 100% of the outstanding 4.875% Notes, representing principal of $5.7 million, were converted into 388,632 shares of Class A Common Stock, as permitted under the indenture.

In October 2013, 100% of the outstanding 3.0% Notes, representing principal of $5.4 million, were converted and settled fully in cash of $10.5 million, as permitted under the indenture.

In October 2013, we raised incremental term loans and revolving commitments and amended certain terms of our bank credit facility.  We raised and additional $450.0 million incremental term loans, which consisted of $200.0 million in incremental delayed draw Term Loan A loans priced at LIBOR plus 2.25%, and $250.0 million in incremental Term Loan B loans priced at LIBOR plus 2.25% with a 0.75% LIBOR floor.

During October 2013, we issued $350.0 million aggregate principal amount of 6.375% Notes. The net proceeds for the 6.375% Notes, together with cash on hand was used to redeem remaining outstanding 9.25% Notes, representing $500.0 million in

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aggregate principal.  Upon the redemption, along with the principal, we paid the accrued and unpaid interest and a make whole premium of $25.4 million, for a total of $546.1 million. We expect to record a loss on extinguishment of $43.1 million in the fourth quarter of 2013 related to this redemption.

We anticipate that existing cash and cash equivalents, cash flow from our operations and borrowing capacity under the Revolving Credit Facility and general committed incremental term loan capacity under our amended and restated bank credit agreement million will be sufficient to satisfy our debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.  We anticipate raising additional funds for our pending acquisitions.  For our long-term liquidity needs, in addition to the sources described above, we may rely upon the issuance of long-term debt, the issuance of equity or other instruments convertible into or exchangeable for equity, or the sale of non-core assets.  However, there can be no assurance that additional financing or capital or buyers of our non-core assets will be available, or that the terms of any transactions will be acceptable or advantageous to us.

Sources and Uses of Cash

The following table sets forth our cash flows for the periods presented (in millions):

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2013			2012			2013			2012
Net cash flows from operating activities	$	97.3		$	83.0		$	150.6		$	163.3
Cash flows (used in) from investing activities:
Acquisition of property and equipment	$	(11.6	)	$	(11.7	)	$	(28.8	)	$	(30.2	)
Payments for acquisition of television stations	(399.3		)	—			(495.4		)	(590.9		)
Payments for acquisitions in other operating divisions	—			—			(4.7		)	—
Investments is equity and cost method investees	(6.8		)	—			(10.2		)	—
Purchase of alarm monitoring contracts	(5.6		)	(1.7		)	(11.9		)	(7.3		)
Proceeds from sale of broadcast assets	—			—			28.0			—
(Increase) decrease in restricted cash	(7.4		)	(42.7		)	(41.0		)	15.8
Other, net	0.6			3.2			7.3			3.3
Net cash flows used in from investing activities	$	(430.1	)	$	(52.9	)	$	(556.7	)	$	(609.3	)
Cash flows from (used in) financing activities:
Proceeds from notes payable, commercial bank financing and capital leases	$	36.5		$	60.6		$	1,198.8		$	615.7
Repayments of notes payable, commercial bank financing and capital leases	(6.4		)	(62.5		)	(998.1		)	(95.8		)
Proceeds from the issuance of common stock	—			—			472.4			—
Dividends paid on Class A and Class B Common Stock	(15.0		)	(12.0		)	(41.9		)	(31.2		)
Noncontrolling interests (distributions) contributions	(0.2		)	(0.3		)	(9.9		)	(0.7		)
Other, net	(3.9		)	(2.4		)	(9.1		)	(10.4		)
Net cash flows from financing activities	$	11.0		$	(16.6	)	$	612.2		$	477.6

Operating Activities

Net cash flows from operating activities increased during the third quarter 2013 compared to the same period in 2012.  This is primarily due to receipt of more cash from customers, net of cash payments to vendors which is primarily due to our acquisitions since the same period in 2012, offset by higher program payments.

Net cash flows from operating activities decreased during the nine months ended September 30, 2013 compared to the same period in 2012.  During 2013, we paid higher interest and program payments, partially offset by the receipt of more cash from customers, net of cash payments to vendors which is primarily due to our acquisitions since the same period in 2012.

Investing Activities

Net cash flows used in investing activities increased during the third quarter of 2013 compared to the same period in 2012.  This increase is primarily due to $360.3 million in payments for acquisitions of television stations from Fisher in the third quarter of 2013.  This increase was partially offset by an increase in restricted cash in the third quarter of 2012 related to escrow deposits required for the acquisition of stations from Newport.

Net cash flows used in investing activities decreased during the nine months ended September 30, 2013 compared to the same period in 2012.  This decrease is primarily due to $199.1 million and $385.3 million in payments for acquisitions of television stations from Four Points and Freedom during 2012, respectively, compared to the $96.2 million and $360.3 million in payments

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for acquisitions of television stations from Cox and Fisher during 2013, respectively.  During 2013, we made escrow deposits of $41.0 million primarily relating to the pending acquisitions of Barrington, TTBG, and New Age. During 2012, $58.5 million of restricted cash was used to fund the acquisition of the Four Points and Freedom stations. This decrease was partially offset by proceeds from the sale of the assets of WLAJ-TV and WLWC-TV.

Financing Activities

Net cash flows from financing activities increased in the third quarter 2013 compared to the same period in 2012.  This increase was primarily due to a loan by a consolidated variable interest entity, and decreased repayments of debt compared to the same period in 2012, partially offset by a decrease in borrowing activity of our revolver balance as compared to the same period in 2012.  During the third quarter of 2013, a higher quarterly stock dividend was paid of $15.0 million compared to $12.0 million during the same period in 2012, due to the issuance of 18.0 million shares of common stock in April and May 2013.

Net cash flows from financing activities decreased during the nine months ended September 30, 2013 compared to the same period in 2012.  During 2013, we issued $600.0 million of senior unsecured notes, and issued 18.0 million shares of Class A Common Stock for net proceeds of $472.4 million, offset by net decreases of $208.9 million of our Term Loan A $189.7 million of our Term Loan B, and repayments on our revolver of $48.0 million.  In the second quarter of 2012, we drew $530.0 million of incremental loans to fund the acquisition of television stations from Four Points and Freedom.  During the nine months ended September 30, 2013, a higher quarterly stock dividend was paid of $41.9 million compared to $31.2 million during the same period in 2012, due to the issuance of 18.0 million shares of common stock in April and May 2013.

In August 2013, our Board of Directors declared a quarterly dividend of $0.15 per share. Future dividends on our common shares, if any, will be at the discretion of our Board of Directors and will depend on several factors including our results of operations, cash requirements and surplus, financial condition, covenant restrictions and other factors that the Board of Directors may deem relevant.

CONTRACTUAL CASH OBLIGATIONS

As of September 30, 2013, material changes to the contractual cash obligations were as follows:

As discussed in Liquidity and Capital Resources, in April 2013, we issued $600.0 million of senior unsecured notes with a maturity date of April 1, 2021 that bear interest at a rate of 5.375% per year.  The net proceeds were used to pay down outstanding indebtedness under our bank credit facility including outstanding amounts under the revolving credit facility.  Also in April 2013, we amended and restated our existing bank credit facility and replaced our existing term loans with a new $500.0 million Term Loan A priced at LIBOR plus 2.25% and due April 2018 and a new $400.0 million Term Loan B priced at LIBOR plus 2.25% with a 0.75% LIBOR floor due April 2020.  We also increased the capacity on our Revolving Credit Facility from $97.5 million to $100.0 million. The net proceeds will be used to fund pending acquisitions and for general corporate purposes.

In September 2013, 100% of the outstanding 4.875% Convertible Senior Notes, due in 2018 (the 4.875%), representing principal of $5.7 million, we converted into 388,632 shares of Class A Common Stock, as permitted under the indenture,

In October 2013, we issued $350 million of senior unsecured notes with a maturity date of November 1, 2021 that bear interest at a rate of 6.375% per year, which proceeds, along with cash on hand, was used to redeem all of the outstanding 9.25% Senior Notes, due 2017, with aggregate principle of $500.0 million.  Also in October 2013, we amended our existing bank credit facility.  Under the amendment, we raised $200.0 million in additional term loan A commitments, for a total of $700.0 million, maturing April 2018, $250.0 million in additional term loan B commitments, for a total of $650.0 million, maturing April 2020, and $57.5 million in additional commitments under the revolving credit facility of our Bank Credit Agreement (the ‘‘Revolver’’), for a total of $157.5 million, maturing April 2018.

In October 2013, 100% of the outstanding 3.0% Convertible Senior Notes, due in 2027 (the 3.0% Notes), representing principal of $5.4 million, were converted and settled fully in cash of $10.5 million, as permitted under the indenture.  As the original terms of the indenture include a cash conversion feature, the effective settlement of the liability and equity components will be accounted for separately.

We have entered into asset and stock purchase agreements with an aggregate purchase price of approximately $1,601 million, less amounts to be paid by third parties and working capital adjustments.  We expect these acquisitions to close within the next six months.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Other than the foregoing, there have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures and Internal Control over Financial Reporting

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting as of September 30, 2013.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.  Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The term “internal control over financial reporting,” as defined in Rules 13a-15d-15(f) under the Exchange Act, means a process designed by, or under the supervision of our Chief Executive and Chief Financial Officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (GAAP) and includes those policies and procedures that:

·pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of our assets;

·provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and

·provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based on the evaluation of our disclosure controls and procedures as of September 30, 2013, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

Management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the

46

degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are party to lawsuits and claims from time to time in the ordinary course of business.  Actions currently pending are in various preliminary stages and no judgments or decisions have been rendered by hearing boards or courts in connection with such actions.  After reviewing developments to date with legal counsel, our management is of the opinion that the outcome of our pending and threatened matters will not have a material adverse effect on our consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.

ITEM 1A.  RISK FACTORS

There have been no material changes to the Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2012.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  MINE SAFETY DISCLOSURES

None.

ITEM 5.  OTHER INFORMATION

None.

47

ITEM 6.  EXHIBITS

Exhibit Number	Description
2.1*	Purchase Agreement, dated as of July 28, 2013, among Barbara B. Allbritton, Robert L. Allbritton, The Estate of Joe L. Allbritton, Barbara B. Allbritton 2008 Marital Trust, Robert Lewis Allbritton 1996 Trust, Allholdco, Inc. and Sinclair Television Group, Inc., with respect to the acquisition of Perpetual Corporation and Charleston Television, LLC
31.1	Certification by David D. Smith, as Chairman and Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.2	Certification by David B. Amy, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
32.1	Certification by David D. Smith, as Chairman and Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.2	Certification by David B. Amy, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

* Sinclair Broadcast Group, Inc. hereby agrees to furnish supplementally a copy of omitted schedules and exhibits to the Commission upon request.

48

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized on the 12th day of November 2013.

SINCLAIR BROADCAST GROUP, INC.
By:	/s/ David R. Bochenek
	David R. Bochenek
	Vice President/Chief Accounting Officer
	(Authorized Officer and Chief Accounting Officer)

49

EXHIBIT INDEX

Exhibit Number	Description
2.1*	Purchase Agreement, dated as of July 28, 2013, among Barbara B. Allbritton, Robert L. Allbritton, The Estate of Joe L. Allbritton, Barbara B. Allbritton 2008 Marital Trust, Robert Lewis Allbritton 1996 Trust, Allholdco, Inc. andSinclair Television Group, Inc., with respect to the acquisition of Perpetual Corporation and Charleston Television, LLC
31.1	Certification by David D. Smith, as Chairman and Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
31.2	Certification by David B. Amy, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(a) of the Exchange Act (15 U.S.C. § 7241).
32.1	Certification by David D. Smith, as Chairman and Chief Executive Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
32.2	Certification by David B. Amy, as Chief Financial Officer of Sinclair Broadcast Group, Inc., pursuant to Rule 13a-14(b) of the Exchange Act and § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C § 1350).
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase

50

EX-2.1

Exhibit 2.1

PURCHASE AGREEMENT

Dated as of July 28, 2013

among

Barbara B. Allbritton,

Robert L. Allbritton,

The Estate of Joe L. Allbritton,

Barbara B. Allbritton 2008 Marital Trust,

Robert Lewis Allbritton 1996 Trust,

Allholdco, Inc.

and

Sinclair Television Group, Inc.

with respect to the acquisition of

Perpetual Corporation

and

Charleston Television, LLC

TABLE OF CONTENTS

		Page
ARTICLE 1	DEFINITIONS; INTERPRETATION	2
1.1.	Definitions	2
1.2.	Definitions Cross-Reference Table	9
1.3.	Interpretation	11
ARTICLE 2	PURCHASE OF EQUITY INTERESTS	11
2.1.	Purchase of Equity Interests	11
2.2.	Purchase Price	11
2.3.	Indemnity Escrow Deposit	12
2.4.	Working Capital Adjustment	12
2.5.	Allocation	15
2.6.	Closing	15
2.7.	Governmental Consents	16
ARTICLE 3	SELLER REPRESENTATIONS AND WARRANTIES	18
3.1.	Organization and Capitalization; Business Subsidiaries; Restructuring	18
3.2.	Authorization	19
3.3.	No Conflicts	20
3.4.	FCC and Programming Distribution Matters	20
3.5.	Taxes	21
3.6.	Tangible Personal Property	23
3.7.	Real Property	24
3.8.	Contracts	25
3.9.	Environmental	27
3.10.	Intangible Property	27
3.11.	Employees; Labor Matters; Employee Benefit Plans	27
3.12.	Insurance	30
3.13.	Compliance with Law; Permits	30
3.14.	Litigation	31
3.15.	Financial Statements	31
3.16.	No Undisclosed Liabilities	31
3.17.	Absence of Changes	31

i

3.18.	No Brokers	31
3.19.	Related Party Transactions	32
3.20.	All Assets	32
ARTICLE 4	BUYER REPRESENTATIONS AND WARRANTIES	32
4.1.	Organization	32
4.2.	Authorization	32
4.3.	No Conflicts	32
4.4.	Litigation	33
4.5.	Qualification	33
4.6.	Projections and Other Information	33
4.7.	Sufficient Funds	34
4.8.	No Brokers	34
ARTICLE 5	CERTAIN COVENANTS	34
5.1.	Sellers’ Covenants	34
5.2.	Control and Maintenance of Qualification	37
5.3.	Restructuring	38
5.4.	Non-Duplication Letters	38
ARTICLE 6	JOINT COVENANTS	38
6.1.	Confidentiality	38
6.2.	Announcements	38
6.3.	Consents	38
6.4.	Employees; Employee Plans	38
6.5.	Access to and Retention of Records	40
6.6.	Cooperation	40
6.7.	Transition Arrangements	40
6.8.	Interim Reports	40
6.9.	Fulfillment of Conditions	41
6.10.	Title Commitments; Surveys	41
6.11.	No Negotiation	41
6.12.	No-Hire	41
6.13.	Financial Statements	42
6.14.	Cooperation in Litigation	42
6.15.	Termination of Related Party Transactions	42

ii

ARTICLE 7	SELLER CLOSING CONDITIONS	42
7.1.	Representations and Covenants	42
7.2.	Proceedings	43
7.3.	FCC Authorization	43
7.4.	Hart Scott Rodino	43
7.5.	Deliveries	43
ARTICLE 8	BUYER CLOSING CONDITIONS	43
8.1.	Representations and Covenants	43
8.2.	Proceedings	44
8.3.	FCC Authorization	44
8.4.	Hart Scott Rodino	44
8.5.	Restructuring	44
8.6.	Deliveries	44
8.7.	Consents	44
8.8.	No Material Adverse Effect	44
ARTICLE 9	CLOSING DELIVERIES	44
9.1.	Seller Documents	44
9.2.	Buyer Documents	45
ARTICLE 10	SURVIVAL; INDEMNIFICATION	45
10.1.	Survival	45
10.2.	Indemnification	46
10.3.	Procedures with Respect to Third Party Claims	48
10.4.	No Special Damages; Mitigation	49
10.5.	Offset	49
10.6.	Treatment of Indemnity Benefits	49
10.7.	No Claims for Post-Closing Tax Periods	49
10.8.	Exclusive Remedies	50
10.9.	Pre-Closing Knowledge	50
ARTICLE 11	TAX MATTERS	50
11.1.	Tax Indemnity	50
11.2.	Straddle Period Allocation	51
11.3.	Tax Returns	51
11.4.	Post-Closing Actions	53

iii

11.5.	Tax Contests	53
11.6.	Refunds	54
11.7.	Cooperation	54
11.8.	Transfer Taxes	55
11.9.	Section 338(h)(10) Elections	55
11.10.	Purchase Price Allocations	56
11.11.	Tax Treatment of Indemnity Payments	57
11.12.	Consolidated Returns for Periods Through the Closing Date	57
11.13.	Intentionally Omitted	57
11.14.	Conflict	57
ARTICLE 12	TERMINATION AND REMEDIES	57
12.1.	Termination	57
12.2.	Cure Period	58
12.3.	Termination and Survival	58
12.4.	Specific Performance	58
12.5.	Liquidated Damages	59
12.6.	Limitation on Seller Damages	59
ARTICLE 13	MISCELLANEOUS	59
13.1.	Expenses	59
13.2.	Further Assurances	60
13.3.	Assignment	60
13.4.	Notices	60
13.5.	Amendments	62
13.6.	Severability	62
13.7.	No Beneficiaries	62
13.8.	Governing Law; Consent to Jurisdiction; Waiver of Jury Trial	62
13.9.	Neutral Construction	63
13.10.	Cooperation	63
13.11.	Non-Recourse	63
13.12.	Fiduciary Capacity	63
13.13.	Counterparts; Delivery by Facsimile/Email	64
13.14.	Entire Agreement	64

iv

PURCHASE AGREEMENT

This PURCHASE AGREEMENT (this “Agreement”) is made as of the 28th day of July, 2013, by and among (i) Barbara B. Allbritton, individually (“BBA”), (ii) Robert L. Allbritton, individually (“RLA”), (iii) BBA and RLA as independent co-executors of the Estate of Joe L. Allbritton (the “Estate”), (iv) BBA and RLA as trustees of the Barbara B. Allbritton 2008 Marital Trust (the “2008 Marital Trust”), (v) RLA, Paul Bonner and John R. Allender as trustees of the Robert Lewis Allbritton 1996 Trust (the “1996 Trust” and, together with the Estate and the 2008 Marital Trust, each, a “Trust” and collectively, the “Trusts”), (vi) Allholdco, Inc., a Delaware corporation (“Allholdco” and, together with BBA, RLA, and the Trusts, each, a “Seller” and collectively, “Sellers”), and (vii) Sinclair Television Group, Inc., a Maryland corporation (“Buyer”).

RECITALS

WHEREAS, BBA, RLA and the Trusts collectively own 100% of the issued and outstanding capital stock of Perpetual Corporation (“Perpetual Corp.”) and Allholdco owns 100% of the issued and outstanding membership interests in Charleston Television, LLC (“Charleston TV” and, together with Perpetual Corp., the “Acquired Parent Companies”);

WHEREAS, the Acquired Parent Companies, together with certain of their respective wholly owned subsidiaries, own and operate, directly or indirectly, the following television broadcast stations (each, a “Broadcast Station” and collectively, the “Broadcast Stations”), pursuant to certain licenses, permits and other authorizations issued by the Federal Communications Commission (the “FCC”):

WCIV(TV), Charleston, SC	WJLA-TV, Washington, D.C.
WSET-TV, Lynchburg, VA	WCFT-TV, Tuscaloosa, AL
W05AA-D, Roanoke, VA	WJSU-TV, Anniston, AL
KTUL(TV), Tulsa, OK	WBMA-LD, Birmingham, AL
WHTM-TV, Harrisburg, PA	KATV(TV), Little Rock, AR

WHEREAS, the Acquired Parent Companies, together with certain of their respective wholly owned subsidiaries, also own and operate in the Washington, D.C. Market an all-news programming service doing business as “NewsChannel 8” (the “NewsChannel” and, together with the Broadcast Stations, each, a “Station” and collectively, the “Stations”);

WHEREAS, pursuant to the terms and subject to the conditions set forth in this Agreement, Sellers desire to sell and transfer to Buyer, and Buyer desires to purchase from Sellers, all of the issued and outstanding equity interests in the Acquired Parent Companies (collectively, the “Equity Interests”);

WHEREAS, in connection with the foregoing, this Agreement contemplates the filing with the FCC of multiple applications to obtain the necessary FCC consents with respect to the transactions described in this Agreement, which applications will include one or more applications seeking FCC consent to the transfer of control of the Acquired Companies to Buyer; and

1

WHEREAS, in connection with the foregoing, prior to the consummation of the transactions contemplated by this Agreement, the Acquired Parent Companies will effect corporate restructuring activities, following which certain of their respective direct or indirect wholly owned subsidiaries that are not involved in any capacity whatsoever in the ownership or operation of the Stations and which do not own any assets used or held for use in connection with the ownership or operation of the Stations will no longer be owned, directly or indirectly, by the Acquired Parent Companies.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1
DEFINITIONS; INTERPRETATION

1.1.         Definitions.  As used in this Agreement, the following terms shall have the following meanings:

“Acquired Companies” shall mean and include the Acquired Parent Companies and the Business Subsidiaries (but for the avoidance of doubt shall not include the Non-Business Subsidiaries).

“Action” shall mean any legal or administrative claim, suit, action, complaint, charge, arbitration or other proceeding by or before any Governmental Entity.

“Affiliate” shall mean, with respect to a specified Person, any Person or member of a group of Persons acting together that, directly or indirectly, through one or more intermediaries, controls, or is controlled by or is under common control with, the specified Person.  As used in this definition, the term “control” (including the terms “controlling,” “controlled by” and “under common control with”) shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Ancillary Documents” shall mean, collectively, the Seller Ancillary Documents and the Buyer Ancillary Documents.

“Balance Sheet Date” shall mean March 31, 2013.

“Business” shall mean the business and operation of the Stations (taken as a collective group and not on an individual basis).

“Business Day” shall mean any day that is not a Saturday, Sunday or other day on which banks are required or authorized by law to be closed (or are actually closed) in the City of New York.

“Business Subsidiaries” shall mean and include those direct or indirect subsidiaries of the Acquired Parent Companies that are involved in the ownership or operation of the Stations or

2

any material assets relating to the ownership or operation of the Stations, in each case as listed on Schedule 1.1 under the heading “Business Subsidiaries”.

“Buyer Principal Liaisons” shall mean and include David D. Smith, David B. Amy and Barry M. Faber and any of their respective successors.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Communications Laws” shall mean, collectively, the Communications Act of 1934, as amended, the Telecommunications Act of 1996 and the Children’s Television Act of 1990, and the rules, regulations and written policies promulgated by the FCC under each of the foregoing, in each case as in effect from time to time.

“Company Transaction Costs” shall mean all fees, costs and expenses of any brokers, financial advisors, investment bankers, attorneys, or other advisors engaged by the Acquired Companies incurred on or prior to the Closing Date plus (i) all retention bonuses and similar payments to employees of the Acquired Companies payable under the Closing of the transaction contemplated by this Agreement and (ii) all prepayment penalties with respect to any Indebtedness of any of the Acquiring Companies that is paid off in conjunction with the Closing of the transactions contemplated by this Agreement.

“Contracts” shall mean contracts, agreements, leases, non-governmental licenses, sales and purchase orders and other agreements (including Revenue Leases, Real Property Leases and employment agreements), written or oral (in each case, including any amendments or modifications thereto).

“Copyrights” shall mean all copyrights and copyright applications and registrations therefor used by an Acquired Company in connection with the Business.

“Current Assets” shall mean and include the following line items on the Final Closing Balance Sheet:  Accounts Receivable, Program Rights, Refundable Income Taxes and Other Current Assets, in each case, as determined in accordance with GAAP, but shall exclude deferred tax assets.

“Current Liabilities” shall mean and include the following line items on the Final Closing Balance Sheet:  Accounts Payable, Program Rights Payable, Accrued Income Taxes, Accrued Employee Benefit Expenses, Deferred Revenue, Other Accrued Expenses (which includes other current liabilities), in each case, as determined in accordance with GAAP, but shall exclude deferred tax liabilities and, for clarification, shall exclude the current portions of any liabilities that are described in Sections 2.2(a) and (b).

“Damages” shall mean and include all losses, costs, damages, taxes, liabilities and expenses, including reasonable attorneys’ fees and expenses.

“DOJ” shall mean the United States Department of Justice.

“Enforceability Exceptions” shall mean bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights

3

generally and general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity).

“Environmental Law” shall mean any Law whether local, state, or federal relating to (a) Releases or threatened Releases of Hazardous Materials into the environment; (b) the use, treatment, storage, disposal, handling, discharging or shipment of Hazardous Material; (c) the regulation of storage tanks; or (d) otherwise relating to pollution or protection of human health, occupational safety and the environment.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” shall mean any trade or business, whether or not incorporated, that, together with the Acquired Companies, would be deemed a “single employer” within the meaning of Section 4001(b)(i) of ERISA.

“FCC Consent” shall mean the consent of the FCC to the transactions contemplated in the FCC Applications, each without any material adverse conditions other than those of general applicability.

“FCC License” shall mean any FCC license, permit or other authorization, including any temporary waiver or special temporary authorization and any renewals thereof or any transferable pending application therefor, (i) with respect to W05AA-D and WBMA-LD, issued by the FCC under Subpart G of Part 74 of Title 47 of the Code of Federal Regulations and granted or assigned to any Acquired Company, and (ii) with respect to any other Broadcast Station, issued by the FCC under Part 73 of Title 47 of the Code of Federal Regulations and granted or assigned to any Acquired Company.

“Final Order” shall mean an Action by the FCC (a) that has not been vacated, reversed, stayed, enjoined, set aside, annulled or suspended, (b) with respect to which no request for stay, motion or petition for rehearing, reconsideration or review, or application or request for review or notice of appeal or sua sponte review by the FCC is pending and (c) as to which the time for filing any such request, motion, petition, application, appeal or notice, and for the entry of orders staying, reconsidering or reviewing on the FCC’s own motion has expired.

“FTC” shall mean the Federal Trade Commission.

“GAAP” shall mean United States generally accepted accounting principles as in effect as of the relevant date, consistently applied.

“Governmental Consents” shall collectively mean the FCC Consent and HSR Clearance.

“Governmental Entity” shall mean and include any court or tribunal or administrative, governmental or regulatory body, agency, commission, board, legislature, instrumentality, division, department, public body or other authority of any nation or government or any political subdivision thereof, whether foreign or domestic and whether national, supranational, state or local.

4

“Hazardous Material” shall mean hazardous or toxic wastes, chemicals, substances, constituents, pollutants or related material, whether solids, liquids, or gases, defined or regulated under § 101(14) of CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300(f) et seq.; the Clean Air Act, as amended, 42 U.S.C. §§ 7401 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq.; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Occupational Safety and Health Act of 1970, 29 U.S.C. §§ 651 et seq. or any similar applicable federal, state or local Environmental Laws.

“Income Taxes” shall mean income, franchise, doing business and similar taxes.

“Indebtedness” shall mean, with regard to any Person, any liability or obligation, whether or not contingent, (i) in respect of borrowed money or evidenced by bonds, monies, debentures, or similar instruments or upon which interest payments are normally made, (ii) for the payment of any deferred purchase price of any property, assets or services (including pursuant to capital leases) but excluding trade payables and Program Rights Obligations, guaranties, direct or indirect, in any manner, of all or any part of any Indebtedness of any Person, (iv) all obligations under acceptance, standby letters of credit or similar facilities, (v) all matured obligations to purchase, redeem, retire, defease or otherwise make any payment in respect of any membership interests, shares of capital stock or other ownership or profit interest or any warrants, rights or options to acquire such membership interests, shares or such other ownership or profit interest, (vi) all accrued interest of all obligations referred to in (i) — (v) and (vii) all obligations referred to in (i) — (vi) of a third party secured by any Lien on property or assets.

“HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Intellectual Property” shall mean all intellectual property rights in or arising from any of the following:  call letters, Trademarks, trade names, service marks, patents, inventions, Trade Secrets, know-how, Internet domain names, websites, web content, databases, software programs or applications (including user-applications), Copyrights, programs and programming material, jingles, slogans and logos and all goodwill, if any, associated therewith.

“IRS” shall mean the United States Internal Revenue Service.

“knowledge” shall mean (a) with respect to Sellers, the actual personal knowledge of Robert L. Allbritton, Frederick J. Ryan, Jr., Stephen P. Gibson and Jerald N. Fritz; provided, however, with respect to the representations in Sections 3.4(c), 3.7(d), 3.7(f), 3.9 and 3.11, “knowledge” shall also include the actual personal knowledge of the general manager and chief engineer (or Person holding a similar position, but not including any contract employee or consultant) of each Broadcast Station, and (b) with respect to Buyer, the actual personal knowledge of David D. Smith, David B. Amy and Barry M. Faber.

“Law” shall mean any United States (federal, state, local) or foreign law, constitution, treaty statute, ordinance, regulation, rule, code, order, judgment, injunction, writ or decree.

5

“Lien” shall mean, with respect to any property or asset, any mortgage, lien, pledge, charge, easement, right of way, restrictive covenant, encroachment, security interest or encumbrance of any kind whatsoever, whether voluntarily incurred or arising by operation of Law or otherwise, in respect of such property or asset.

“Market” shall mean the “Designated Market Area” of a Station, as determined by the Nielsen Company.

“Material Adverse Effect” shall mean any event, state of facts, circumstance, development, change, effect or occurrence (an “Effect”) that, individually or in the aggregate with any other Effect, has had or would reasonably be expected to have a materially adverse effect on (a) the business, properties, assets, financial condition or results of operations of the Acquired Companies or the Business, or (b) the ability of Sellers to perform their obligations under this Agreement, excluding in all respects any Effects resulting from (i) conditions in the economy of the United States generally, including changes in the United States or foreign credit, debt, capital or financial markets (including changes in interest or exchange rates) or the economy of any town, city or region or country in which the Stations conduct business, (ii) general changes or developments in the broadcast television industry, (iii) the execution and delivery of this Agreement, the announcement of this Agreement and the transactions contemplated hereby, the consummation of the transactions contemplated hereby, the compliance with the terms of this Agreement or the taking of any action required by this Agreement or consented to by Buyer, (iv) earthquakes, hurricanes, tornadoes, natural disasters or global, national or regional political conditions, including hostilities, military actions, political instability, acts of terrorism or war or any escalation or material worsening of any such hostilities, military actions, political instability, acts of terrorism or war existing or underway as of the date hereof, (v) any failure, in and of itself, by Sellers, any Acquired Company or any Station or group of Stations to meet any internal or published projections, forecasts or revenue or earnings predictions for any period ending on or after the date of this Agreement (provided, however, that the underlying causes of such failure (subject to other provisions of this definition shall not be excluded), (vi)  any breach by Buyer of its obligations under this Agreement or (vii) changes in Law or GAAP or the interpretation thereof.

“Multiemployer Plan” shall mean a multiemployer pension plan, within the meaning of Section 4001(a)(3) of ERISA, to which the Acquired Companies contribute or are required to contribute to, or under which the Acquired Companies have or may have any liability or obligation under, on behalf of current or former employees of the Acquired Companies.

“Net Working Capital Amount” shall mean (a) the amount of all Current Assets minus (b) the amount of all Current Liabilities of the Acquired Companies on a combined basis, in each case calculated in a manner consistent with GAAP.

“Non-Business Subsidiaries” shall mean and include those direct or indirect subsidiaries of the Acquired Parent Companies that are not involved in any capacity whatsoever in the ownership or operation of the Stations and which do not own any assets used or held for use in the ownership or operation of the Stations, in each case as listed on Schedule 1.1 under the heading “Non-Business Subsidiaries”.

6

“Non-Union Station Employees” shall mean Station Employees who are not Union Station Employees.

“Organizational Documents” shall mean, with respect to any Person (other than an individual), the articles or certificate of incorporation, bylaws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement, operating agreement and any other organizational documents of such Person.

“Permitted Liens” shall mean, as to any property or asset of any Station, collectively, (a) liens for Taxes, assessments and governmental charges not yet due and payable or that are being contested in good faith and for which appropriate reserves have been created on the books and records of the Acquired Companies in accordance with GAAP, (b) zoning Laws and ordinances and similar Laws that are not materially violated by any existing improvements or that do not prohibit the use of the Real Property as currently used in the Business, (c) any right reserved to any Governmental Entity to regulate the affected property (including restrictions stated in any permits), (d) in the case of any leased asset, (i) the rights of any lessor under the applicable lease agreement or any Lien granted by any lessor or any Lien that the applicable lease is subject to, (ii) any statutory Lien for amounts that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been created in accordance with GAAP and (iii) the rights of the grantor of any easement or any Lien granted by such grantor on such easement property, (e) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, material men and other Liens imposed by law arising or incurred in the ordinary course of business for amounts that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which appropriate reserves have been created in accordance with GAAP and that are not resulting from any material breach, violation or default of any Contract by the Acquired Companies, (f) minor defects of title, easements, rights-of-way, restrictions and other Liens not interfering with the present use of the applicable assets subject thereto, (g) any state of facts that an accurate survey or physical inspection would show, provided such facts do not render title unmarketable or interfere with the present use of the applicable Real Property, (h) Liens that will be released prior to or as of the Closing Date, including all mortgages and security interests securing indebtedness of Sellers or the Acquired Companies, (i) licenses of Intellectual Property granted in the ordinary course of business, (j) gaps in the chain-of-title for Intellectual Property evident from the public records of the relevant federal, state or foreign Governmental Entity maintaining the applications or registrations therefor, as applicable and (k) Liens designated as Permitted Liens on Schedule 1.1 under the heading “Permitted Liens”, if any.

“Person” shall mean any natural person or any corporation, limited liability company, partnership, joint venture, trust or other legal entity, including a Governmental Entity.

“Program Rights” shall mean all rights of the Stations to broadcast television programs or shows as part of the Stations’ programming, including all rights of the Stations under all film and program barter agreements, sports rights agreements, news rights or service agreements, affiliation agreements and syndication agreements.

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“Program Rights Obligations” means all obligations in respect of the purchase, use, licenses or acquisition of programs, programming materials, films and similar assets used primarily in connection with the Business which relate to the utilization of the Program Rights.

“Release” shall mean any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“Restructuring” shall mean and include those certain corporate restructuring activities to be effected by Sellers or the Acquired Companies prior to the Closing Date with respect to the Non-Business Subsidiaries, in each case as described in greater detail on Schedule 1.1 under the heading “Restructuring”.

“Revenue Leases” shall mean those leases, subleases, licenses or other occupancy agreements used primarily in the operation of the Business (including any and all assignments, amendments and other modifications of such leases, subleases, licenses and other occupancy agreements), pertaining to the use or occupancy of the Real Property where an Acquired Company holds an interest as landlord, licensor, sublandlord or sublicensor.

“Tax” or “Taxes” shall mean (i) any and all federal, state, local or foreign income, gross receipts, franchise, estimated, alternative minimum, add on minimum, sales, use, transfer, escheat, abandoned or unclaimed property, goods or services, registration, value added, excise, natural resources, severance, stamp, occupation, premium, windfall profit, environmental, customs, duties, profits, real property, personal property, capital stock, social security (or similar), employment, unemployment, disability, payroll, license, employee or other withholding, or other tax, of any kind whatsoever, including any interest, penalties or additions to tax or additional amounts in respect of the foregoing, whether or not disputed, (ii) liability for the payment of any amounts of the type described in the foregoing clause (i) arising as a result of being (or ceasing to be) a member of any Affiliated Group (or being included (or required to be included) in any Tax Return relating thereto) including any liability under Treasury Regulations Section 1.1502-6 and (iii) liability for the payment of any amounts of the type described in the foregoing clause (i) as a result of any express or implied obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person.

“Tax Returns” shall mean any returns, reports, claims for refund, declarations of estimated Taxes and information statements, including any schedule or attachment thereto or any amendment thereof, with respect to Taxes required to be filed with any Governmental Entity, including consolidated, combined and unitary tax returns.

“Tower Leases” shall mean any agreement to which an Acquired Company or a business Subsidiary is a party pertaining to the use and/or installation of radio masts and/or towers used primarily by the Stations for telecommunications and broadcasting in connection with the operation of the Business, where the Acquired Company holds an interest as tenant or subtenant.

“Trade Secrets” shall mean all proprietary information of each Acquired Company that is not generally known and is used exclusively in the Business, as to which reasonable efforts have

8

been made to prevent unauthorized disclosure, and which provides a competitive advantage to those who know or use it.

“Trademarks” shall mean all trade names, trademarks, service marks, trade dress, jingles, slogans, logos, other source or business identifiers, trademark and service mark registrations and trademark and service mark applications owned by any Acquired Company and used in the Business, including those set forth on Schedule 3.10, and the goodwill appurtenant thereto.

“Tradeout Agreement” shall mean any Contract, other than film and program barter agreements, pursuant to which an Acquired Company has agreed to sell or trade commercial air time or commercial production services of a Station in consideration for any property or service in lieu of or in addition to cash.

“Union Station Employees” shall mean all Station Employees the terms of whose employment are governed by a Collective Bargaining Agreement.

1.2.         Definitions Cross-Reference Table.  The following terms defined in this Agreement in the sections set forth below shall have the respective meanings therein defined:

1996 Trust	Preamble
2008 Marital Trust	Preamble
Acquired Parent Companies	Recitals
Agreement	Preamble
Allholdco	Preamble
Allocation Schedule	Section 11.10(b)
Allocation Schedule Notice of Disagreement	Section 11.10(b)
BBA	Preamble
Broadcast Station and Broadcast Stations	Recitals
Business Subsidiary Equity Interests	Section 3.1(c)
Buyer	Preamble
Buyer Ancillary Agreements	Section 4.1
Buyer Indemnified Parties	Section 10.2(a)
Charleston TV	Recitals
Claim	Section 10.3(a)
Closing	Section 2.6(a)
Closing Date	Section 2.6(a)
COBRA	Section 3.11(i)
Collective Bargaining Agreements	Section 3.11
Covered Matters	Section 13.8(a)
Cure Period	Section 12.2
Deductible	Section 10.2(b)
Deductible Success-Based Fees	Section 11.3(a)
Disagreement Notice	Section 2.4(e)
Effective Time	Section 2.6(c)
Employee Plan	Section 3.11(b)
Equity Interests	Recitals

9

Escrow Agent	Section 2.3
Estate	Preamble
Estimated Closing Balance Sheet	Section 2.4(a)
Estimated Net Working Capital Amount	Section 2.4(a)
FCC	Recitals
FCC Application	Section 2.7(a)
Final Adjustment Amount	Section 2.4(i)
Final Closing Balance Sheet	Section 2.4(g)
Final Net Working Capital Amount	Section 2.4(g)
Financial Statements	Section 3.15
HSR Clearance	Section 2.7(b)
Indemnified Parties	Section 10.4
Indemnifying Parties	Section 10.4
Indemnity Escrow Agreement	Section 2.3
Indemnity Escrow Deposit	Section 2.3
Indemnity Escrow Fund	Section 2.3
Independent Accountant	Section 2.4(f)
Intangible Property	Section 3.10
Leased Real Property	Section 3.7(b)
Liquidated Damages Amount	Section 12.5(a)
Material Contracts	Section 3.8(a)
MVPDs	Section 3.4(d)
NDA	Section 6.1
NewsChannel	Recitals
Other Tax Contest	Section 11.5(c)
Outside Date	Section 12.1(d)
Owned Real Property	Section 3.7(a)
Permits	Section 3.13
Perpetual Corp.	Recitals
Pre-Closing Tax Contest	Section 11.5(b)
Pre-Closing Tax Period	Section 11.1(a)
Pre-Closing Tax Return	Section 11.3(a)
Post-Closing Tax Period	Section 11.1(b)
Property Taxes	Section 11.2
Purchase Price	Section 2.2
Real Property	Section 3.7(b)
Real Property Leases	Section 3.7(b)
reasonable best efforts	Section 2.7(e)
Related Party Transactions	Section 3.19
Renewal Application	Section 2.7(c)
Required Consents	Section 6.3
Reviewed Closing Balance Sheet	Section 2.4(d)
Reviewed Net Working Capital Amount	Section 2.4(d)
Reviewed Net Working Capital Overage	Section 2.4(h)

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Reviewed Net Working Capital Shortfall	Section 2.4(h)
RLA	Preamble
Section 338 Allocation Schedule	Section 11.10(a)
Section 338(h)(10) Election Forms	Section 11.9(b)
Section 338(h)(10) Elections	Section 11.9(a)
Seller and Sellers	Preamble
Seller Ancillary Agreements	Section 3.1(a)
Seller Indemnified Parties	Section 10.2(c)
Sharing Agreement	Section 3.4(d)
Station and Stations	Recitals
Station Employees	Section 6.5(a)
Straddle Period	Section 11.2
Straddle Tax Return	Section 11.3(b)
Surveys	Section 6.10
Tangible Personal Property	Section 3.6(a)
Tax Contest	Section 11.5(a)
Title Commitments	Section 6.10
Transfer Taxes	Section 11.8
Trust and Trusts	Preamble
Unwind Agreement	Section 2.6(a)

1.3.         Interpretation.  Article titles and section headings herein are for convenience of reference only and are not intended to affect the meaning or interpretation of this Agreement.  The Schedules hereto shall be construed with and as an integral part of this Agreement to the same extent as if set forth verbatim herein.  Where the context so requires or permits, the use of the singular form includes the plural, and the use of the plural form includes the singular.  When used in this Agreement, unless the context clearly requires otherwise, (a) words such as “herein”, “hereof”, “hereto”, “hereunder”, and “hereafter” shall refer to this Agreement as a whole, (b) the term “including” shall not be limiting, but shall be deemed to be followed by the phrase “without limitation”, (c) the word “or” shall not be exclusive and (e) the terms “Dollars”, “dollars” and “$” each mean lawful money of the United States of America.

ARTICLE 2
PURCHASE OF EQUITY INTERESTS

2.1.         Purchase of Equity Interests.  On the terms and subject to the conditions hereof, at the Closing, Sellers shall sell and transfer to Buyer, and Buyer shall purchase from Sellers, the Equity Interests.

2.2.         Purchase Price.  At the Closing, Buyer shall pay or cause to be paid an aggregate amount equal to $985,000,000 (the “Purchase Price”) by wire transfer of immediately available funds, as follows:

(a)           Buyer shall pay or cause to be paid to each lender under the loan agreements specified by Sellers in writing not less than five (5) days prior to the Closing Date, to

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an account designated by such lender in writing, the amount of the indebtedness specified in such lender’s pay-off letter.

(b)           Buyer shall pay or cause to be paid all identified Company Transaction Costs that remain outstanding as of the Closing Date to such account or accounts as are designated by Perpetual Corp.

(c)           Buyer shall pay or cause to be paid to an account designated by the Escrow Agent, the Indemnity Escrow Deposit.

(d)           Buyer shall pay or cause to be paid to an account designated by Sellers, the Purchase Price less the amounts described in Sections 2.2(a), 2.2(b) and 2.2(c) above, subject to adjustment as provided in this Agreement.

2.3.         Indemnity Escrow Deposit.  On the Closing Date, Buyer shall deposit in escrow with Deutsche Bank AG (the “Escrow Agent”) cash in an amount equal to $39,400,000 (the “Indemnity Escrow Deposit”).  The Indemnity Escrow Deposit shall be held by the Escrow Agent in an escrow fund (the “Indemnity Escrow Fund”) pursuant to the terms of this Agreement and an Indemnity Escrow Agreement mutually acceptable to Buyer and Sellers (the “Indemnity Escrow Agreement”) for a period of twelve (12) months following the Closing Date, except to the extent earlier released to Sellers as provided herein or to the Buyer Indemnified Parties to satisfy any indemnity obligations of Sellers to the Buyer Indemnified Parties under this Agreement or for the payments to Buyer pursuant to Section 2.4(i).  Notwithstanding the foregoing, the Indemnity Escrow Agreement shall provide that (i) on and as of the date that is six (6) months following the Closing Date, the Escrow Agent shall release to Sellers from the Indemnity Escrow Fund an amount equal to $19,700,000 less the amount of any claims by the Buyer Indemnified Parties for indemnification under this Agreement outstanding and unpaid as of such date and (ii) on and as of the date that is twelve (12) months following the Closing Date, the Escrow Agent shall release to Sellers from the Indemnity Escrow Fund an amount equal to the amount of funds then held by the Escrow Agent in the Indemnity Escrow Fund (including all interest and other earnings thereon), less the amount of all claims by the Buyer Indemnified Parties for indemnification under this Agreement that are outstanding and unpaid as of such date, if any.

2.4.         Working Capital Adjustment.

(a)           No later than five (5) Business Days prior to the Closing Date, Sellers shall deliver to Buyer an unaudited pro forma estimated balance sheet for the Acquired Companies, as of 11:59 p.m. Eastern Time on the date prior to the Closing Date (the “Estimated Closing Balance Sheet”), together with an estimated, itemized calculation, based on the Estimated Closing Balance Sheet, of the Net Working Capital Amount as of 11:59 p.m. Eastern Time on the date prior to the Closing Date (the “Estimated Net Working Capital Amount”).  The Estimated Closing Balance Sheet shall be prepared in accordance with GAAP.

(b)           At any time prior to the Closing Date, Buyer shall have the right to object to the Estimated Closing Balance Sheet or the Estimated Net Working Capital Amount by delivering written notice of such objection to Sellers.  If Buyer does not provide such written

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notice of objection to Sellers, then the Estimated Closing Balance Sheet and the Estimated Net Working Capital Amount shall, subject to Section 2.4(d), be deemed accepted by Buyer.  If, on the other hand, Buyer provides such written notice of objection to Sellers, then representatives of Buyer and Sellers shall meet as promptly as practicable to discuss in good faith the proper Estimated Closing Balance Sheet and the proper Estimated Net Working Capital Amount; provided, however, that if such representatives of Buyer and Sellers are unable to agree in good faith prior to the Closing Date on the proper Estimated Closing Balance Sheet and the proper Estimated Net Working Capital Amount, then the Estimated Net Working Capital Amount shall be deemed to be equal to the Estimated Net Working Capital Amount as presented by Sellers.

(c)           At the Closing, the Purchase Price shall be (i) increased by the Estimated Net Working Capital Amount if the Estimated Net Working Capital Amount is a positive number, and (ii) decreased by the absolute value of the Estimated Net Working Capital Amount, if the Estimated Net Working Capital Amount is a negative number.

(d)           Within thirty (30) days following the Closing Date, Buyer shall prepare and deliver to Sellers an unaudited balance sheet for the Acquired Companies as of 11:59 p.m. Eastern Time on the date prior to the Closing Date (the “Reviewed Closing Balance Sheet”), together with an itemized calculation, based on the Reviewed Closing Balance Sheet, of the Net Working Capital Amount as of 11:59 p.m. Eastern Time on the date prior to the Closing Date (the “Reviewed Net Working Capital Amount”).  The Reviewed Closing Balance Sheet shall be prepared in accordance with GAAP using the same accounting principles, policies and methods as were historically used by Sellers in preparing the Estimated Closing Balance Sheet in connection with the calculation of each of the line items reflected thereon.

(e)           If Sellers disagree with the Reviewed Closing Balance Sheet or Buyer’s calculation of the Reviewed Net Working Capital Amount, then during the thirty (30) days following the date of Sellers’ receipt of the Reviewed Closing Balance Sheet, Buyer and the Acquired Companies shall each provide Sellers with access to the working papers of Buyer and the Acquired Companies relating to the Reviewed Closing Balance Sheet and the resulting calculation of the Reviewed Net Working Capital Amount, as well as any other information used in preparing the Reviewed Closing Balance Sheet as is reasonably requested by Sellers.  The Reviewed Closing Balance Sheet and the resulting calculation of the Reviewed Net Working Capital Amount shall become final and binding at the end of such thirty (30) day period unless, prior to the end of such period, Sellers have delivered to Buyer written notice of their disagreement with such Reviewed Closing Balance Sheet and the resulting calculation of the Reviewed Net Working Capital Amount (a “Disagreement Notice”), specifying the nature and amount of any disputed item.

(f)            In the event that any Disagreement Notice is timely provided to Buyer pursuant to Section 2.4(e), Buyer and Sellers shall cooperate for a period of thirty (30) days following Buyer’s receipt of the Disagreement Notice (or such longer period as Buyer and Sellers may mutually agree) to resolve any disagreements with respect to the Reviewed Closing Balance Sheet and the Reviewed Net Working Capital Amount.  If, at the end of such thirty (30) day period, Buyer and Sellers are unable to resolve any disagreements with respect to the Reviewed Closing Balance Sheet or the Reviewed Net Working Capital Amount, then a mutually acceptable, nationally recognized independent accounting firm that does not then have a

13

relationship with Sellers or Buyer) (the “Independent Accountant”) shall be engaged to resolve any remaining disagreements with respect to the Reviewed Closing Balance Sheet and/or the Reviewed Net Working Capital Amount.  Buyer and Sellers shall instruct the Independent Accountant to determine as promptly as practicable, but in any event within thirty (30) days of the date on which such dispute is referred to the Independent Accountant, whether and to what extent the Reviewed Closing Balance Sheet and/or the Reviewed Net Working Capital Amount requires adjustment; provided, however, that the Independent Accountant shall be authorized to resolve only those items remaining in dispute between Buyer and Sellers as specified in the Disagreement Notice, in each case within the range of the difference between Buyer’s position with respect thereto and Sellers’ position with respect thereto.  The fees and expenses of the Independent Accountant (including any indemnity obligations to the Independent Accountant) shall be allocated between Buyer and Sellers based on their relative success with respect to the disputed items (as finally determined by the Independent Accountant).  For example, if Sellers challenge the calculation of the Reviewed Net Working Capital Amount by an amount of $100,000, but the Independent Accountant determines that Sellers have a valid claim for only $40,000, Buyer shall bear forty percent (40%) of the fees and expenses of the Independent Accountant and Sellers shall bear the other sixty percent (60%) of such fees and expenses.  The fees and expenses (if any) of Buyer’s independent auditors and attorneys incurred in connection with the review of the Disagreement Notice shall be borne by Buyer, and the fees and expenses (if any) of Sellers’ independent auditors and attorneys incurred in connection with their review of the Reviewed Net Working Capital Amount shall be borne by Sellers.

(g)           The “Final Net Working Capital Amount” shall be equal to (i) the Reviewed Net Working Capital Amount, in the event that Sellers do not provide a Disagreement Notice to Buyer within the thirty (30) day period provided for in Section 2.4(e) or (ii) the as-adjusted Reviewed Net Working Capital Amount as determined by the Independent Accountant pursuant to Section 2.4(f), in the event that Sellers provide a Disagreement Notice to Buyer within the thirty (30) day period provided for in Section 2.4(e).  The Final Net Working Capital Amount shall be set forth on the “Final Closing Balance Sheet”, which shall be (x) the Reviewed Closing Balance Sheet in the event that Sellers do not provide a Disagreement Notice to Buyer within the thirty (30) day period provided for in Section 2.4(e) or (y) the as-adjusted Reviewed Closing Balance Sheet as determined by the Independent Accountant pursuant to Section 2.4(f), in the event that Sellers provide a Disagreement Notice to Buyer within the thirty (30) day period provided for in Section 2.4(e).

(h)           If the Estimated Net Working Capital Amount is greater than the Final Net Working Capital Amount, then the difference between the Estimated Net Working Capital Amount, minus the Final Net Working Capital Amount shall be referred to as a “Reviewed Net Working Capital Shortfall”.  If the Final Net Working Capital Amount is greater than the Estimated Net Working Capital Amount, then the difference between the Final Net Working Capital Amount, minus the Estimated Net Working Capital Amount shall be referred to as a “Reviewed Net Working Capital Overage”.

(i)            The “Final Adjustment Amount” shall be an amount equal to either the Reviewed Net Working Capital Shortfall or the Reviewed Net Working Capital Overage, as applicable.  In the event that the Final Adjustment Amount is a Reviewed Net Working Capital Shortfall, the Purchase Price shall be reduced by such amount and Buyer shall recover such

14

amount from the Indemnity Escrow Fund pursuant to joint written instructions of Buyer and Sellers delivered to the Escrow Agent.  In the event that the Final Adjustment Amount is a Reviewed Net Working Capital Overage, the Purchase Price shall be increased by such amount and Buyer shall pay such amount to Sellers by wire transfer in immediately available funds to an account(s) designated by Sellers.

(j)            Any payments to be made pursuant to Section 2.4(i) shall be made within five (5) days of the final determination of the Final Adjustment Amount pursuant to Section 2.4(i) and shall bear interest from the Closing Date to the date of such payment at a rate, calculated daily on the basis of a year of three hundred sixty-five (365) days and the actual number of days elapsed, equal to the prime rate of interest as announced or published in The Wall Street Journal.

2.5.         Allocation.  The Purchase Price (after any adjustments thereto) shall be allocated among the shares of Perpetual Corp. and the membership interests in Charleston TV as reflected on Schedule 2.5, in each case as adjusted to reflect the Final Adjustment Amount.

2.6.         Closing.

(a)           Subject to any prior termination of this Agreement pursuant to Section 11.1, the consummation of the sale and purchase of the Equity Interests pursuant to this Agreement (the “Closing”) shall take place at the offices of Paul Hastings LLP located at 875 15th Street, N.W., Washington D.C. 20005 on (i) the fifth (5th) Business Day after the date that is the later of (x) the date on which the FCC Consent shall have been granted and shall be in full force and effect, and shall have become a Final Order and (y) the date on which the HSR Clearance has been obtained, or (ii) such other date or at such other location as is mutually agreed to Buyer and Sellers in writing (as applicable, the “Closing Date”), subject to the satisfaction or waiver of the conditions to Closing set forth herein (other than those conditions that by their nature are to be satisfied at the Closing but subject to the satisfaction or waiver of such conditions at the Closing); provided, however, that, notwithstanding Section 7.3, Buyer, in its sole discretion and upon ten (10) days’ prior written notice to Sellers, may waive the requirement that the FCC Consent become a Final Order if, in connection therewith, the parties execute and deliver at the Closing a mutually acceptable unwind agreement relating to the transactions contemplated hereby (the “Unwind Agreement”), unless Buyer waives the requirement to execute an Unwind Agreement.

(b)           A breach by a party of its obligations to effect the Closing pursuant to the terms and subject to the conditions of this Agreement, including this Section 2.6, shall be subject to Section 12.1(b) or Section 12.1(c), as applicable (and shall not be subject to the Cure Period under Section 12.2).

(c)           For purposes of this Agreement, the “Effective Time” means 12:01 a.m. Eastern Time on the Closing Date.  If the Closing shall not have occurred for any reason within the original effective period of the FCC Consent, and neither party shall have terminated this Agreement under Article 12 hereof, Buyer and Sellers shall jointly request one or more extensions of the effective period of the FCC Consent; provided, however, that no such extension

15

of the FCC Consent shall limit the right of either party to exercise such party’s rights under Article 12.

2.7.         Governmental Consents.

(a)           Within ten (10) Business Days of the date of this Agreement, Buyer and Sellers shall, and Sellers shall cause the Acquired Companies to, jointly file an application or applications with the FCC requesting the grant of its consent to the transfer of control of the Acquired Companies from Sellers to Buyer (collectively, the “FCC Application”).  Buyer and Sellers shall, and Sellers shall cause the Acquired Companies to, diligently prosecute the FCC Application and otherwise use their reasonable best efforts (including by taking the “Resolution Measures” set forth on Schedule 2.7(f)) to obtain the FCC Consent as soon as practicable; provided, however, that except as provided in the following sentence, neither Buyer nor Sellers, as applicable, shall be required to pay consideration to any third party to obtain FCC Consent.  Buyer shall pay one-half (1/2), and Sellers shall pay one-half (1/2) of the FCC filing fees relating to the transactions contemplated hereby, irrespective of whether the transactions contemplated by this Agreement are consummated.  Sellers and Buyer each shall oppose any petitions to deny or other objections filed with respect to the FCC Applications to the extent such petition or objection relates to such party.  Neither Buyer nor Sellers shall, and Sellers shall cause the Acquired Companies not to, take any intentional action which would, or intentionally fail to take such action the failure of which to take would, reasonably be expected to have the effect of materially delaying the grant of the FCC Consent.

(b)           Intentionally Omitted.

(c)           If applicable, within ten (10) Business Days after the date of this Agreement, Buyer and Sellers shall make any required filings with the FTC and the DOJ pursuant to the HSR Act, with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation and otherwise use their reasonable best efforts (including by taking the “Resolution Measures” set forth on Schedule 2.7(f)) to obtain the expiration or termination of any applicable waiting period under the HSR Act (the “HSR Clearance”).  Any filing fees payable under the HSR Act relating to the transactions contemplated hereby shall be borne one-half (1/2) by Buyer and one-half (1/2) by Sellers.

(d)           In connection with the expiration of the FCC Licenses as set forth on Schedule 3.4(a), if, at any point prior to the Closing, an application for the renewal of any FCC License (a “Renewal Application”) must be filed pursuant to the Communications Laws, Sellers shall cause each applicable Acquired Company to timely execute, file and prosecute with the FCC such Renewal Application in accordance with Section 5.1(b) hereof.  If any FCC Application is granted by the FCC subject to a renewal condition, then, without limitation of Section 2.7(a) or (e), the term “FCC Consent” shall be deemed to also include the satisfaction of such renewal condition.  In order to avoid disruption or delay in the processing of the FCC Applications, Buyer shall agree (i) as a part of the FCC Applications, to request that the FCC apply its policy permitting the transfer of control of FCC licenses in transactions involving multiple stations to proceed, notwithstanding the pendency of one or more Renewal

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Applications, and (ii) to make such representations and undertakings as are necessary or appropriate to invoke such policy, including undertakings to assume, as between the parties and the FCC, the position of the applicant before the FCC with respect to any pending Renewal Application and to assume the corresponding regulatory risks relating to any such Renewal Application, provided, however, that nothing set forth in this Section 2.7(d) shall be deemed to amend or modify the provision of Section 10.2 relating to indemnification.  In addition, Buyer acknowledges that, to the extent reasonably necessary to expedite the grant by the FCC of any Renewal Application with respect to any Broadcast Station and thereby to facilitate grant of the FCC Application with respect to such Broadcast Station, the Acquired Companies shall be permitted to enter into tolling, assignment and assumption or similar agreements with the FCC to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against such Broadcast Station in connection with (i) any pending complaints that such Broadcast Station aired programming that contained obscene, indecent or profane material or (ii) any other enforcement matters against such Broadcast Station with respect to which the FCC may permit the Acquired Companies to enter into a tolling, assignment or assumption agreement; provided, however, that Buyer agrees to accept liability in connection with any such complaint or enforcement action by the FCC, if so requested by the FCC as part of such tolling or other arrangements, subject to the indemnification obligations set forth in Section 10.2(a).  Buyer and Sellers shall consult in good faith with each other prior to any Acquired Company entering into any such tolling, assignment or assumption agreement under this Section 2.7(d).

(e)           Without limiting the provisions of Sections 2.7(a), 2.7(b), 2.7(c) and 2.7(d), Sellers and Buyer shall, and Sellers shall cause the Acquired Companies to, (i) use reasonable best efforts to obtain as promptly as practicable any necessary consents, approvals, waivers and authorizations of, actions or nonactions by, and make as promptly as practicable all necessary filings and submissions with, any Governmental Entity or any third party necessary in connection with the consummation of the transactions contemplated by this Agreement; provided, however, that in no event shall Sellers or any of the Acquired Companies be required to pay any fee, penalty or other consideration to obtain any consent, approval, order, waiver or authorization in connection with the transactions contemplated by this Agreement under any contract other than de minimis amounts or amounts that are advanced or reimbursed substantially simultaneously by Buyer, (ii) use reasonable best efforts to (x) avoid a suit, action, petition to deny, objection, proceeding or investigation, whether judicial or administrative and whether brought by a Governmental Entity or any third party and (y) avoid the entry of, or to effect the dissolution of, any injunction, stay, temporary restraining order or other order in any such suit, action, petition to deny, objection, proceeding or investigation, in each case, challenging this Agreement or the transactions contemplated hereby or that would otherwise prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement, (iii) use reasonable best efforts to cooperate with each other in (x) determining which filings are required to be made prior to the Effective Time with, and which material consents, approvals, Permits, notices or authorizations are required to be obtained prior to the Effective Time from, Governmental Entities or third parties in connection with the execution and delivery of this Agreement and the transactions contemplated hereby and (y) timely making all such filings and timely seeking all such consents, approvals, Permits, notices or authorizations, (iv) use reasonable best efforts to cause the conditions to the Closing set forth in Article 8 and Article 9 to be satisfied as promptly as reasonably practicable and (v) use reasonable best efforts to take, or cause to be taken, all other actions and do, or cause to be done, and cooperate with

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each other in order to do, all other things necessary or appropriate to consummate the transactions contemplated hereby as soon as practicable.  In connection with the foregoing, Sellers, on the one hand, will provide Buyer, and Buyer, on the other hand, will provide Sellers, with copies of any material correspondence, filing or communication (or oral summaries or memoranda setting forth the substance thereof) between such party or any of its agents or representatives, on the one hand, and any Governmental Entity or members of their respective staffs, on the other hand, with respect to this Agreement and the transactions contemplated hereby.  Prior to submitting or making any such correspondence, filing or communication to any such Governmental Entity or members of their respective staffs, the parties shall first provide the other party with a copy of such correspondence, filing or communication in draft form and give such other party a reasonable opportunity to discuss its content before it is submitted or filed with the relevant Governmental Entities, and shall consider and take account of all reasonable comments timely made by the other party with respect thereto.  To the extent permitted by applicable law, each of the parties shall ensure that the other party is given the opportunity to attend any meetings with or other appearances before any Governmental Entity with respect to the transactions contemplated by this Agreement.

(f)            For purposes of this Section 2.7, “reasonable best efforts” shall include (i) diligently prosecuting the FCC Application, (ii) vigorously defending, contesting and objecting to any claims, lawsuits, petitions to deny, objections, actions or other proceedings, whether judicial or administrative, by or before any Governmental Entity challenging this Agreement or the transactions contemplated hereby or that would otherwise prevent or materially impede, interfere with, hinder or delay the consummation of the transactions contemplated by this Agreement, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed, and (iii) taking the “Resolution Measures” set forth on Schedule 2.7(f); provided, however, that Sellers and the Acquired Companies shall not be required to take, and Buyer shall not take, any such actions contemplated in clauses (i) through (iii) above which would bind Sellers or the Acquired Companies in respect of any matter if the Closing does not occur.

(g)           If the Closing shall not have occurred for any reason within the original effective period of the FCC Consent, and neither party shall have terminated this Agreement under Section 12.1, Buyers and Sellers shall jointly request an extension of the effective period of the FCC Consents.  No extension of the FCC Consents shall limit the rights of either party to exercise its rights under Section 12.1.

ARTICLE 3
SELLER REPRESENTATIONS AND WARRANTIES

Sellers hereby make, jointly and severally, the following representations and warranties to Buyer as of the date hereof and as of the Closing:

3.1.         Organization and Capitalization; Business Subsidiaries; Restructuring.

(a)           Each Acquired Company is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which its respective assets or properties are located.  Each Seller has the

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requisite corporate power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by such Seller pursuant hereto (collectively, the “Seller Ancillary Agreements”) and to consummate the transactions contemplated hereby and thereby.

(b)           The Equity Interests (i) constitute all of the outstanding equity interests of the Acquired Parent Companies, (ii) are owned beneficially and of record by Sellers, in each case free and clear of all Liens (other than Permitted Liens) and (iii) are duly authorized, validly issued, fully paid and nonassessable.  Other than the Equity Interests, there are no issued, reserved for issuance or outstanding (w) equity interests in, other voting securities of or other ownership interests in any Acquired Parent Company, (x) securities of any Acquired Parent Company convertible into or exchangeable for equity interests in, other voting securities of or other ownership interests in any Acquired Parent Company, (y) warrants, calls, options or other rights to acquire from any Acquired Parent Company, or other obligations of any Acquired Parent Company to issue, any equity interests in, other voting securities of or other ownership interests in such Acquired Parent Company or securities directly or indirectly convertible into or exercisable or exchangeable for equity interests in, other voting securities of or other ownership interests in any Acquired Parent Company or (z) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of any equity interests in, other voting securities of or other ownership interests in any Acquired Parent Company.

(c)           Each Acquired Parent Company is directly or indirectly the record and beneficial owner of all of the outstanding equity interests of each Business Subsidiary (the “Business Subsidiary Equity Interests”).  All of such Business Subsidiary Equity Interests have been duly authorized and are validly issued, fully paid and nonassessable and are owned directly or indirectly by the applicable Acquired Parent Company, in each case free and clear of all Liens (other than Permitted Liens).  Other than the Business Subsidiary Equity Interests, there are no issued, reserved for issuance or outstanding (i) equity interests in, other voting securities of or other ownership interests in any Business Subsidiary, (ii) securities of any Business Subsidiary convertible into or exchangeable for equity interests in, other voting securities of or other ownership interests in any Business Subsidiary, (iii) warrants, calls, options or other rights to acquire from any Business Subsidiary, or other obligations of any Business Subsidiary to issue, any equity interests in, other voting securities of or other ownership interests in any Business Subsidiary or securities directly or indirectly convertible into or exercisable or exchangeable for equity interests in, other voting securities of or other ownership interests in any Business Subsidiary or (iv) restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of any equity interests in, other voting securities of or other ownership interests in any Business Subsidiary.

3.2.         Authorization.  The execution, delivery and performance of this Agreement and the Seller Ancillary Agreements by Sellers and, as applicable, the Acquired Companies have been duly authorized and approved by all necessary corporate action of Sellers and the Acquired Companies and their respective directors, officers and stockholders and do not require any further authorization or consent of Sellers or the Acquired Companies or their respective

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directors, officers or stockholders.  This Agreement is, and each Seller Ancillary Agreement when executed and delivered by Sellers and the other parties thereto will be, a valid and binding agreement of Sellers, enforceable in accordance with its terms, except in each case as such enforceability may be limited by the Enforceability Exceptions.

3.3.         No Conflicts.  Except as set forth on Schedule 3.3 and except for the Governmental Consents and the consents to assign the Material Contracts indicated as requiring consent on Schedule 3.8(a), the execution, delivery and performance by Sellers of this Agreement and the Seller Ancillary Agreements and the consummation by Sellers of the transactions contemplated hereby or thereby does not and will not, with or without notice or the passage of time (a) violate the Organizational Documents of Sellers or the Acquired Companies, (b) violate in any material respect, or result in the creation of any Lien (other than any Permitted Lien) under, any Law, judgment, order or decree to which any Seller or Acquired Company is subject, (c) result in a material breach of, or event of default or the creation of any Lien (other than any Permitted Lien) under, any Material Contract or (d) require the consent or approval of, or a filing by any Seller with, any Governmental Entity.

3.4.         FCC and Programming Distribution Matters.

(a)           Schedule 3.4(a) sets forth a true and complete list of the FCC Licenses and the holders thereof, which FCC Licenses constitute all of the FCC Licenses of the Broadcast Stations.  The FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated, and have not expired.  Except as set forth on Schedule 3.4(a), the FCC Licenses (i) have been issued for the full terms customarily issued by the FCC for each class of Broadcast Station and (ii) are not subject to any condition, except for those conditions appearing on the face of the FCC Licenses and conditions generally applicable to each class of Broadcast Station.

(b)           The Acquired Companies have operated each Broadcast Station in compliance with the Communications Laws and the FCC Licenses in all material respects and have paid or caused to be paid all FCC regulatory fees due in respect to each Broadcast Station.  All material registrations and reports required to have been filed with the FCC relating to the FCC Licenses have been filed and the Acquired Companies have completed or caused to be completed the construction of all facilities or changes contemplated by any of the FCC Licenses or construction Permits issued to modify the FCC Licenses.  There is not pending, nor, to Sellers’ knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings to amend FCC rules of general applicability), nor is there issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Broadcast Stations or the Acquired Companies with respect to the Broadcast Stations that would reasonably be expected to result in any such action.  Except as set forth on Schedule 3.4(b) and other than proceedings affecting broadcast stations generally, there are no material applications, petitions, proceedings or other material actions or complaints pending or, to Sellers’ knowledge, threatened before the FCC relating to the Broadcast Stations.  Except as set forth on Schedule 3.4(b) and except for tolling agreements entered into pursuant to Section 2.7(c), none of the Acquired Companies nor any of the Broadcast Stations has (i) entered into a tolling agreement or otherwise waived any statute of limitations relating to the Broadcast

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Stations during which the FCC may assess any fine or forfeiture or take any other action or (ii) agreed to any extension of time with respect to any FCC investigation or proceeding.

(c)           Sellers are qualified under the Communications Laws to transfer control of the FCC Licenses to Buyer.  To Sellers’ knowledge, there are no facts or circumstances relating to the Broadcast Stations, Sellers or the Acquired Companies that would reasonably be expected to (i) result in the FCC’s refusal to grant the FCC Consent, (ii) materially delay the receipt of the FCC Consent.  Sellers have no reason to believe that the FCC Applications might be challenged or might not be granted by the FCC in the ordinary course due to any fact or circumstance relating to the Sellers, the Acquired Companies, the Business or the FCC Licenses.

(d)           None of the Acquired Companies is a party to any local marketing agreement, time brokerage agreement, joint sales agreement or other similar agreement (collectively, a “Sharing Agreement”).

(e)           Schedule 3.4(e) contains, as of the date hereof, (i) a list of all retransmission consent agreements or, with respect to the NewsChannel, any other carriage agreement, with multi-channel video programming distributors, including cable systems, telephone companies and direct broadcast satellite systems (together, “MVPDs”) with more than 10,000 subscribers with respect to each Station, and (ii) a list of the MVPDs that, to Sellers’ knowledge, carry any Station and have more than 10,000 subscribers with respect to each such Station outside such Station’s Market.  The Acquired Companies have entered into retransmission consent agreements or, with respect to the NewsChannel, other carriage agreements, with respect to each MVPD with more than 10,000 subscribers in any of the Stations’ Markets.  Since October 1, 2011 and until the date hereof, except as set forth on Schedule 3.4(e), (x) no headend with more than 10,000 subscribers covered by an MVPD in any of the Stations’ Markets has provided written notice to Sellers or any Acquired Company of any material signal quality issue or has failed to respond to a request for carriage or, to Sellers’ knowledge, sought any form of relief from carriage of a Station from the FCC and (y) neither Sellers nor any Acquired Company has received any written notice from any MVPD with more than 5,000 subscribers in any of the Station’s Markets of such MVPD’s intention to delete a Station from carriage or to change a Station’s channel position.

3.5.         Taxes.

(a)           Each of the Acquired Companies has timely filed with the appropriate Governmental Entities all Income Tax Returns and all other material Tax Returns which are required to have been filed by them under applicable Law, and all such Tax Returns are complete, true and correct in all material respects.  All Taxes due and payable by any of the Acquired Companies (whether or not shown on any Tax Return) have been fully and timely paid, except for Taxes contested in good faith by appropriate proceedings.

(b)           Except as set forth on Schedule 3.5(b), (i) no Seller expects any Taxing authority to assess any additional Taxes for any period for which Tax Returns have been filed, (ii) no federal, state, local, or non-U.S. Tax audits or administrative or judicial Tax proceedings are pending or being conducted with respect to any of the Acquired Companies, (iii) no Seller nor any of the Acquired Companies has received from any federal, state, local, or non-U.S.

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Taxing authority (including jurisdictions where none of the Acquired Companies have filed Tax Returns) any (x) notice indicating an intent to open an audit or other review, (y) request for information related to Tax matters, or (z) notice of deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Taxing authority against any of the Acquired Companies, (iv) no Acquired Company has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax other than as the result of extending the due date of a Tax Return for any Acquired Company, (v) no Acquired Company is the beneficiary of any extension of time within which to file any Tax Return, (vi) no Acquired Company has granted to any Person a power of attorney with respect to Taxes pertaining to any Acquired Company, and (vii) no Acquired Company has availed itself of any Tax amnesty or similar relief with respect to an Acquired Company in any Taxing jurisdiction.

(c)           Other than agreements or arrangements solely among Acquired Companies, neither Sellers nor any of the Acquired Companies is a party to or bound by any Tax sharing agreement or similar arrangements (including any indemnity arrangements).

(d)           Except as set forth on Schedule 3.5(d), no Acquired Company is or, within the last ten (10) years, has been a member of an affiliated group of corporations filing a consolidated federal income Tax Return (or a group of corporations filing a consolidated, combined or unitary income Tax Return under comparable provisions of state, local or foreign Tax law) other than a group the common parent of which is or was an Acquired Company.

(e)           All Taxes required to be withheld by the Acquired Companies in connection with any amounts paid or owing to any employee, independent contractor, creditor, equity holder or other third party have been collected or withheld and either paid to the respective Governmental Entity or set aside in accounts for such purpose.

(f)            There are no Liens for Taxes upon any of the assets of the Acquired Companies, except Permitted Liens.

(g)           Charleston TV is treated as a C corporation for U.S. federal Income Tax purposes and is a member of an affiliated group of corporations filing a consolidated U.S. federal Income Tax Return, the common parent of which is Allholdco.

(h)           No claim has been made in writing or otherwise addressed to any Acquired Company by a taxing authority in a jurisdiction where such Acquired Company does not file Tax Returns that it is or may be subject to taxation by that jurisdiction.

(i)            No Acquired Company has or had a permanent establishment in any foreign country and does not and has not engaged in a trade or business in any foreign country.

(j)            None of the Acquired Companies or the Sellers is a foreign person within the meaning of Section 1445 of the Code.

(k)           (i) there is no agreement, or requirement, that affects any Acquired Company, or by which any Acquired Company is bound, to make any adjustment under Section 481(a) of the Code by reason of a change in accounting method or otherwise for any

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taxable period (or portion thereof) ending after the Closing Date; (ii) no Acquired Company has made or is otherwise bound by or subject to any election or is required to treat any of its assets as owned by another Person pursuant to the provisions of Section 168(f) of the Code or as tax-exempt bond financed property or tax-exempt use of property within the meaning of Section 168 of the Code; and (iii) no Acquired Company owns any property that is subject to a “section 467 rental agreement” as defined in Section 467 of the Code.

(l)            No Acquired Company has any material liability for the Taxes of any Person (i) under Treasury regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), (ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.

(m)         No Acquired Company will be required to include any item of income in, or exclude any item of deduction from, taxable income for any Post-Closing Tax Period (or portion of any Post-Closing Tax Period) after the Closing Date as a result of any (i) closing agreement as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or non-U.S. Tax Law); (ii) installment sale or open transaction disposition occurring on or prior to the Closing Date; (iii) change in method of accounting for a taxable period ending on or prior to the Closing Date; (iv) an election under Section 108(i) of the Code; (v) prepaid amount received on or prior to the Closing Date; or (vi) intercompany transaction described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of Tax Law).

(n)           No Acquired Company has distributed to any Person stock or securities of a controlled corporation, nor has stock or securities of an Acquired Company been distributed, in a transaction to which Section 355 of the Code applies in the two years prior to the date of this Agreement.

(o)           No Acquired Company is or has been a party to any “reportable transaction” within the meaning of Treasury Regulation Section 1.6011-4(b).

(p)           None of the Acquired Companies (i) is a party to any agreement, contract, arrangement or plan that has resulted or could result, separately or in the aggregate, in the payment of any “excess parachute payment” within the meaning of Code §280G (or any corresponding provision of state, local, or non-U.S. Tax law) or (ii) has been a United States real property holding corporation within the meaning of Code §897(c)(2) during the applicable period specified in Code §897(c)(1)(A)(ii).

(q)           To Sellers’ knowledge, each Acquired Company has disclosed on their federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Code §6662.

3.6.         Tangible Personal Property.

(a)           Schedule 3.6(a) contains a list of all material items of equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts and other tangible personal property of every kind and description owned or held for use by the Acquired Companies in connection with the Business, except for any retirements or dispositions thereof made between the date hereof and the Closing in accordance with Article 5 (the “Tangible

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Personal Property”).  Except as set forth on Schedule 3.6(a), immediately prior to the Closing, the Acquired Companies will have good and valid title to the Tangible Personal Property free and clear of all Liens (other than Permitted Liens).

(b)           Except as set forth on Schedule 3.6(b), all material items of Tangible Personal Property are in good operating condition, ordinary wear and tear excepted and have been maintained in accordance with normal industry practice.

(c)           No Person other than an Acquired Company has any rights to use any of the Tangible Personal Property, whether by lease, sublease, license or other instrument, other than set forth on Schedule 3.6(c).

3.7.         Real Property.

(a)           Schedule 3.7(a) contains a list of all real property (including any appurtenant easements, buildings, structures, fixtures and other improvements thereon) that is owned in fee simple by the Acquired Companies, indicating the owner thereof (collectively, the “Owned Real Property”).

(b)           Schedule 3.7(b) contains a list of all material contracts, agreements and leases (collectively, “Real Property Leases”) pursuant to which any Acquired Company leases, licenses or sublicenses real property (including any appurtenant easements, buildings, structures, fixtures and other improvements thereon) (collectively, the “Leased Real Property” and, together with the Owned Real Property, the “Real Property”) as leasee, licensee or sublicensee, as applicable.

(c)           Except as set forth on Schedule 3.7(c), immediately prior to the Closing, the Acquired Company identified on Schedule 3.7(a) will have good and marketable fee simple title to the Owned Real Property indicated on Schedule 3.7(a) as being owned by such Acquired Company, in each case free and clear of Liens, other than Permitted Liens.  Except as set forth on Schedule 3.7(c), no Acquired Company is obligated under, nor is a party to, any option, right of first refusal or other contractual right to purchase, acquire, sell, assign or dispose of any of the Owned Real Property or any portion thereof or interest therein.

(d)           With respect to the Real Property, there is no (i) pending or, to Sellers’ knowledge, threatened condemnation, eminent domain or taking proceeding or (ii) to Sellers’ knowledge, private restrictive covenant or governmental use restriction (including zoning) on all or any portion of the Real Property that prohibits or materially interferes with the current use of the Real Property.

(e)           Except as set forth on Schedule 3.7(e), neither Sellers nor any Acquired Company, within the past two (2) years, has received any written notice of any material violation of any material Law affecting the Owned Real Property or the Real Property Leases or any Acquired Company’s use thereof.

(f)            Within the past two (2) years, neither Sellers nor any Acquired Company has received any written notice of any existing plan or study by any Governmental Entity or by any other Person that challenges or otherwise adversely affects the continuation of the use or

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operation of any Owned Real Property or Real Property Leases and Sellers have no knowledge of any such plan or study with respect to which it has not received written notice.  Except as set forth in the Revenue Leases, to the knowledge of Sellers, there is no Person in possession of any Owned Real Property other than an Acquired Company.  Except as identified in Schedule 3.7(f), no Person has any right to acquire any interests in any of the Owned Real Property.

3.8.         Contracts.

(a)           Schedule 3.8(a) sets forth, as of the date hereof, a true and complete list of the following Contracts related to the Business to which any Acquired Company is a party:

(i)            any Contract under which the aggregate payments or receipts for the past twelve (12) months exceeded, or for the following twelve (12) months is expected to exceed, $150,000;

(ii)           any contract under which payments by or obligations of any Acquired Company will be increased, accelerated or vested by the occurrence (whether alone or in conjunction with any other event) of any of the transactions contemplated by this Agreement, or under which the value of the payments by or obligations of any Acquired Company will be calculated on the basis of any of the transactions contemplated by this Agreement, whether pursuant to a change in control or otherwise;

(iii)          any contract for Program Rights that involves cash payments or cash receipts in excess of $100,000 over the remaining term of such contract;

(iv)          any network affiliation agreement;

(v)           any retransmission consent agreement with any MVPD with more than 10,000 subscribers in any of the Station’s Markets;

(vi)          any Contract that relates to an ownership interest in any corporation, partnership, joint venture or other business enterprise or other entity, excluding wholly owned subsidiaries of any Acquired Company;

(vii)         any Real Property Lease;

(viii)        any Contract that relates to the guarantee (whether absolute or contingent) by any Acquired Company of (x) the performance of any other Person (other than a wholly owned subsidiary of any Acquired Company) or (y) the whole or any part of the Indebtedness or liabilities of any other Person (other than a wholly owned subsidiary of any Acquired Company);

(ix)          any Collective Bargaining Agreement;

(x)           any Contract that contains any power of attorney authorizing the incurrence of an obligation on the part of any Acquired Company;

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(xi)          any Contract that creates any partnership or joint venture or relates to the acquisition, issuance or transfer of any securities;

(xii)         any Contract that limits or restricts (x) where any Acquired Company may conduct business, (y) the type or line of business (current or future) in which any Acquired Company may engage or (z) any acquisition of assets or stock (tangible or intangible) by any Acquired Company;

(xiii)        any Contract that relates to the borrowing or lending of money;

(xiv)        any Contract that grants any Person an option or a right of first refusal, right of first offer or similar preferential right to purchase or acquire any equity interest in, or assets of, any Acquired Company;

(xv)         any Contract involving the purchase or sale of Real Property that has not closed as of the date hereof;

(xvi)        any Contract entered into after January 1, 2013 relating to the acquisition or disposition of any material portion of the Business (whether by merger, sale of stock, sale of assets or otherwise);

(xvii)       any Contract involving construction, architecture, engineering or other agreements relating to uncompleted construction projects, in each case that involve payments in excess of $100,000;

(xviii)      any Contract involving compensation to any Station Employee, or independent contractor or consultant engaged to perform services to the Business in excess of $100,000 per year (provided, however, that for purposes of this Section 3.8(a)(xviii), the term Contract shall not include at-will Contracts or Contracts that can be terminated upon 30 days’ notice without penalty or additional payment);

(xix)        any Contract with a Governmental Entity (other than ordinary course Contracts with Governmental Entities as a customer) which imposes any material obligation or restriction on an Acquired Company; and

(xx)         any Contract relating to the use of a Station’s digital bit stream other than in connection with broadcast television services.

The contracts, agreements and leases required to be disclosed pursuant to this Section 3.8(a) are collectively referred to herein as the “Material Contracts”.

(b)           Each of the Material Contracts is in full force and effect and is binding and enforceable upon the Acquired Companies and, to Sellers’ knowledge, the other parties thereto, subject in each case to the Enforceability Exceptions.  The Acquired Companies have performed their obligations under each of the Material Contracts in all material respects and are not in material default thereunder, and to Sellers’ knowledge, no other party to any of the Material Contracts is in default thereunder in any material respect.

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3.9.         Environmental.  Except as set forth on Schedule 3.9, and except as would not reasonably be expected to result in the owner or operator of the Stations or the Real Property incurring liability under any applicable Environmental Law (a) to Sellers’ knowledge, each Acquired Company is and has been in compliance with all Environmental Laws applicable to the Stations and the Real Property, which compliance includes obtaining, maintaining and complying in all material respects with all Permits, licenses or other authorizations required by Environmental Law and (b) no Actions are pending or, to Sellers’ knowledge, threatened against Sellers, any Acquired Company, the Stations or the Real Property alleging a violation of or liability under Environmental Laws.  To Sellers’ knowledge, no conditions exist at the Stations or any Real Property that would reasonably be expected to result in the owner or operator of the Stations or the Real Property incurring liability under Environmental Laws.  Sellers have made available to Buyer copies or summaries of all current material non-privileged environmental assessments, audits, investigations or other similar environmental reports relating to the Stations or the Real Property that are in the possession, custody or control of Sellers or the Acquired Companies.  To Sellers’ knowledge, there have been no Releases of Hazardous Materials at, from, to, on or under any Owned Real Property that give rise to an affirmative reporting or cleanup obligation under Environmental Law.  There are no underground storage tanks at the Owned Real Property and no Acquired Company utilizes any underground storage tanks at the Real Property subject to the Real Property Leases.

3.10.       Intangible Property.  Schedule 3.10 contains a description of all material Intellectual Property that is owned by or licensed to the Acquired Companies or is registered or the subject of an application for registration with the U.S. Patent and Trademark Office (or any equivalent foreign office) (collectively, the “Intangible Property”).  Except as set forth on Schedule 3.10, (i)  to Sellers’ knowledge, the Acquired Companies’ use of the Intangible Property does not infringe upon any third party’s Intellectual Property in any material respect, (ii) to Sellers’ knowledge, none of the Intangible Property is being infringed or misappropriated by any third party, (iii) no Intangible Property is the subject of any pending or, to Sellers’ knowledge, threatened Action claiming infringement of any third party’s Intellectual Property and (iv) in the past three (3) years, neither Sellers nor any Acquired Company has received any written claim asserting that its use of any Intangible Property is unauthorized or violates or infringes upon the Intellectual Property of any third party or challenging the ownership, use, validity or enforceability of any Intangible Property.  To Sellers’ knowledge, the Acquired Companies are the owners of or have the valid right to use the Intangible Property free and clear of Liens, other than Permitted Liens, in the applicable jurisdictions in which such Intangible Property is currently being used.

3.11.       Employees; Labor Matters; Employee Benefit Plans.

(a)           Except as set forth on Schedule 3.11(a), each Acquired Company has complied in all material respects with all labor and employment Laws, including those which relate to wages, hours, terms and conditions of employment, discrimination in employment and collective bargaining, equal opportunity, harassment, immigration, disability, workers’ compensation, unemployment compensation, occupational health and safety and the collection and payment of withholding.  Except as set forth on Schedule 3.11(a), as of the date hereof and since January 1, 2012, there has been no unfair labor practice charge against any Acquired Company pending or, to Sellers’ knowledge, threatened before the National Labor Relations

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Board, any state labor relations board or any court or tribunal, nor has any written complaint pertaining to any such charge or potential charge been delivered to Sellers or any Acquired Company.  Except as set forth on Schedule 3.11(a), there is no strike, dispute, request for representation, slowdown or stoppage pending or, to Sellers’ knowledge, threatened in respect of any Acquired Company.  Other than the collective bargaining agreements set forth on Schedule 3.11(a) (the “Collective Bargaining Agreements”), no Acquired Company is a party to any collective bargaining, union or similar agreement with respect to its respective Station Employees, and to Sellers’ knowledge, other than the labor union parties to the Collective Bargaining Agreements, no union represents or claims to represent or is attempting to organize such Station Employees.  The Acquired Company’s classification of each of its employees as exempt or nonexempt has been made in accordance with Law in all material respects.

(b)           Sellers have made available to Buyer a list, dated as of no earlier than June 30, 2013, of all Station Employees, including the names, current rate of compensation, employment status (i.e., active, disabled, on authorized leave), department, title, whether covered by a collective bargaining agreement and whether full-time or part-time.  Such list, redacted to delete current rate of compensation, is attached as Schedule 3.11(b).

(c)           Schedule 3.11(c) contains a list setting forth each employee benefit plan, program or arrangement currently sponsored, maintained or contributed to by any Acquired Company or any ERISA Affiliate, or with respect to which an Acquired Company or any ERISA Affiliate has or may have any actual or contingent liability or obligation (including any such obligations under any terminated plan or arrangement), including employee benefit plans, as defined in Section 3(3) of ERISA, Multiemployer Plans, deferred compensation plans, stock option or other equity compensation plans, stock purchase plans, phantom stock plans, bonus plans, fringe benefit plans, life, health, dental, vision, hospitalization, disability and other insurance plans, employee assistance program, severance or termination pay plans and policies, and sick pay and vacation plans or arrangements, whether or not described in Section 3(3) of ERISA.  Each and every such plan, program, agreement or arrangement is hereinafter referred to as an “Employee Plan”.  With respect to each Employee Plan, Sellers have provided or made available to Buyer the following (i) copies of all written Employee Plans (including all trust agreements, insurance or annuity contracts, investment management agreements, record keeping agreements and other material documents or instruments relating thereto), and in the case of any Employee Plan that is not in written form, an accurate description of all material terms, (ii) the three (3) most recent Annual Reports (Form 5500 Series) and accompanying schedules, if any, and the most recent actuarial report (to the extent applicable), (iii) the current summary plan description, if any exists, (iv) the most recent determination letter from the IRS, if any, with respect to each such Employee Plan which is intended to qualify under Section 401(a) of the Code, (v) all material correspondence from the IRS or the Department of Labor, and (vi) copies of non-discrimination testing results for the three most recent plan years.  As of the Closing, the Station Employees shall cease to be eligible to participate in all Employee Plans.

(d)           Except as set forth on Schedule 3.11(d), with respect to each Employee Plan:  (i) each has been established and is being operated in all material respects in compliance with its terms and all applicable Laws, including ERISA and the Code; (ii) no Actions or disputes are pending, or to Sellers’ knowledge, threatened that, if successful, would reasonably be expected to result in aggregate liability to all Acquired Companies of $150,000 or more; (iii)

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no audits, inquiries, reviews, proceedings, claims, or demands are pending with any governmental or regulatory agency; (iv) there are no facts which could give rise to any material liability in the event of any such investigation, claim, Action, audit, review, or other proceeding; (v) all premiums, contributions, or other payments required to have been made by Law or under the terms of any Employee Plan or any Contract or agreement relating thereto as of the Closing Date have been made; (vi) all material reports, returns and similar documents required to be filed with any Governmental Entity or distributed to any plan participant have been duly and timely filed or distributed; (vii) no “prohibited transaction” has occurred within the meaning of the applicable provisions of ERISA or the Code; and (viii) there have been no acts or omissions by the Acquired Companies or any ERISA Affiliate that have given or could give rise to any material fines, penalties, taxes or related charges under Sections 502(c), 502(i), 502(l), 502(m) or 4071 of ERISA or Section 511 or Chapter 43 of the Code, or under any other applicable Law, for which any Acquired Company or any ERISA Affiliate may be liable.

(e)           No Employee Plan provides for any payment by the Acquired Companies that would result in the payment of any compensation or other payments that would not be deductible under the terms of Section 280G of the Code after giving effect to the transactions contemplated hereby.

(f)            Except as set forth on Schedule 3.11(f), neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby shall:  (i) result in the acceleration of the time of payment or vesting or creation of any rights of any current or former employee, manager, director or consultant to compensation or benefits under any Employee Plan or otherwise that would be payable by any Acquired Company or Buyer; (ii) result in any payment becoming due, or increase the amount of any compensation due, in each case, from any Acquired Company or Buyer to any current or former employee, manager, director or consultant of the Acquired Companies; or (iii) increase any benefits otherwise payable under any Employee Plan.

(g)           Except as set forth on Schedule 3.11(g), (i) none of the Acquired Companies contributes to or is required to contribute, or has any liability or obligation, to any Multiemployer Plan, and (ii) no Employee Plan is (w) subject to Section 412 of the Code or Title IV of ERISA, (x) is a “multiple employer plan” within the meaning of Section 210 of ERISA or Section 413(c) of the Code, (y) is a “multiple employer welfare arrangement” as such term is defined in Section 3(40) of ERISA, or (z) provides group health or death benefits following termination of employment, other than to the extent required by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code or by a comparable state Law (“COBRA”).  With respect to any Multiemployer Plans set forth on Schedule 3.11(g):  (A) all contributions required to be made with respect to employees of the Acquired Companies have been timely paid; (B) the Acquired Companies have not incurred and is not expected to incur, directly or indirectly, any withdrawal liability under ERISA with respect to any such plan (whether by reason of the transactions contemplated by the Agreement or otherwise); (C) neither the Acquired Companies nor any ERISA Affiliate has withdrawn, partially withdrawn, or received any notice of any claim or demand for withdrawal liability or partial withdrawal liability against any of them; (D) no such plan is (or is expected to be) insolvent or in reorganization and no accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, exists or is expected to exist with respect to any such plan nor any such plan is or

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reasonably expected to be “at-risk” under Section 430 of the Code; and (E) neither the Acquired Companies nor any ERISA Affiliate has any actual or contingent liability under Section 4204 of ERISA.

(h)           With respect to each Employee Plan intended to qualify under Section 401(a) of the Code:  (i) the IRS has issued a favorable determination letter or opinion letter or advisory letter (copies of which have been provided to Buyer) upon which the Acquired Companies are entitled to rely under IRS pronouncements, that such plan is, and such plan and its related trust are in fact, qualified under Section 401(a) of the Code and the related trusts are exempt from federal Income Tax under Section 501(a) of the Code; and (ii) no such determination letter, opinion letter or advisory letter has been revoked nor has revocation been threatened, nor has any amendment or other action or omission occurred with respect to any such plan since the date of its most recent determination letter, opinion letter or advisory letter, or application therefor, in any respect which would adversely affect its qualification, or materially increase its costs.

(i)            Each Employee Plan that constitutes a nonqualified deferred compensation plan subject to Section 409A of the Code has been operated and administered in compliance, in both form and operation, with the provisions of Section 409A of the Code and the treasury regulations and other generally applicable guidance published by the IRS thereunder, and, to the extent not inconsistent therewith, the Employee Plan’s terms.  None of the Acquired Companies is a party to, or otherwise obligated under, any Employee Plan or otherwise, which provides for a gross up of Taxes imposed by Section 409A of the Code.

3.12.       Insurance.  Schedule 3.12 lists (a) all insurance policies maintained by Sellers or the Acquired Companies covering the Acquired Companies, the Stations or the Business and (b) the premiums and coverages of such policies as of the date of this Agreement.  All such policies are (and will remain until the Effective Time) in full force and effect.  There is no material claim pending under any such insurance policy as to which coverage has been questioned, denied or disputed by the underwriters of such insurance policy, and neither Sellers nor any Acquired Company has received any written threatened termination of any of such insurance policies.

3.13.       Compliance with Law; Permits.  Subject to Section 3.4 and Schedule 3.4(a) with respect to the FCC Licenses, and except as set forth on Schedule 3.13, (a) the Acquired Companies have complied in all material respects with all Laws and all decrees, judgments and orders of any Governmental Entity and (b) there are no Actions (exclusive of investigations by or before the FCC) pending or, to Sellers’ knowledge, threatened against any Acquired Company, except for those affecting the television broadcast industry generally.  Except as set forth on Schedule 3.13, (i) the Acquired Companies hold all material licenses, franchises, permits, certificates, approvals and authorizations from Governmental Entities necessary for the conduct of the Business as currently conducted (collectively, the “Permits”), (ii) all such Permits are valid and in full force and effect and (iii) the Acquired Companies are in material compliance with the terms of all Permits.  To Sellers’ knowledge, there is no Action pending or, to Sellers’ knowledge, threatened regarding the suspension, revocation, or cancellation of any Permits.

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3.14.       Litigation.  Except as set forth on Schedule 3.14, as of the date hereof, there is no Action pending or, to Sellers’ knowledge, threatened against the Acquired Companies (a) that would reasonably be expected to result in aggregate damages to all of the Acquired Companies in excess of $250,000 or (b) which would reasonably be expected to affect Sellers’ ability to perform their obligations under this Agreement or otherwise impede, prevent or materially delay the consummation of the transactions contemplated by this Agreement.

3.15.       Financial Statements.  Schedule 3.15 sets forth copies of the following financial statements from Sellers’ internal reporting system relating solely to the Acquired Companies and the Business (such financial statements, collectively, the “Financial Statements”):  (a) the unaudited balance sheet and statement of operations as of and for the fiscal year ended September 30, 2012 and (b) the unaudited balance sheet and statement of operations as of and for the six (6) months ended March 31, 2013.  The Financial Statements have been derived from the books and records of Sellers and the Acquired Companies and fairly present, in all material respects, the financial position and results of operations of the Acquired Companies as of the dates thereof and for the periods indicated therein in conformity with GAAP (except insofar as such unaudited Financial Statements may omit footnotes and may be subject to potential year-end adjustments that are not expected, either individually or in the aggregate, to be material).

3.16.       No Undisclosed Liabilities.  Except as set forth on Schedule 3.16, the Acquired Companies have no liabilities or obligations of any kind or nature, whether known or unknown, absolute or contingent, accrued or unaccrued which would be required to be disclosed on a balance sheet prepared in accordance with GAAP or the notes thereto, except for liabilities which are (a) reflected or reserved for in the Financial Statements, (b) included in the calculation of the Net Working Capital Amount, (c) current liabilities incurred in the ordinary course of business since the Balance Sheet Date, (d) contractual and similar liabilities incurred in the ordinary course of business and not required to be disclosed on a balance sheet prepared in accordance with GAAP or the notes thereto, (e) liabilities arising under applicable Law and not required to be disclosed on a balance sheet prepared in accordance with GAAP or the notes thereto, or (f) contemplated by this Agreement.

3.17.       Absence of Changes.  Since the Balance Sheet Date, there have not been any events, changes or occurrences or state of facts that, individually or in the aggregate, have had or would reasonably be expected to have, a Material Adverse Effect.  Since the Balance Sheet Date, the Acquired Companies and the Stations have been operated in all material respects in the ordinary course of business consistent with past practice and there has not been in respect of the Business any damage, destruction or loss, whether or not covered by insurance, with respect to any of its property and assets having a replacement cost of more than $100,000 per Market, in each case, which damage, destruction or loss has not been (or, as of the Closing Date, will not be) remedied.

3.18.      No Brokers.  Except for the services of Moelis & Company to Sellers, for which the applicable fee shall be paid by Sellers, no broker, investment banker, financial advisor or other third party has been employed or retained by Sellers in connection with the transactions contemplated by this Agreement or is or may be entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses, in connection

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with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Sellers or the Acquired Companies.

3.19.       Related Party Transactions.  Except as set forth on Schedule 3.19 and other than employment arrangements, the Acquired Companies are not currently party to any material Contract with any Affiliate of Sellers or any member, manager, director, officer or employee of any Acquired Company, Sellers or any Affiliate of Sellers (collectively, “Related Party Transactions”).

3.20.       All Assets.  Except as set forth on Schedule 3.20 and after giving effect to the Restructuring, Buyer, upon the Closing, will acquire all right, title and interest in and to all assets (including all Real Property) used or held for use in the Business, and such assets will constitute all the assets owned, leased or licensed by Sellers, the Acquired Companies or any Affiliate of Sellers and used or held for use in the Business.

ARTICLE 4
BUYER REPRESENTATIONS AND WARRANTIES

Buyer hereby makes the following representations and warranties to Sellers as of the date hereof and as of the Closing:

4.1.         Organization.  Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization.  Buyer has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be executed and delivered by Buyer pursuant hereto (collectively, the “Buyer Ancillary Agreements”) and to consummate the transactions contemplated hereby and thereby.

4.2.         Authorization.  The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer has been duly authorized and approved by all necessary corporate action of Buyer and its directors, officers and stockholders and does not require any further authorization or consent of Buyer or its directors, officers or stockholders.  This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, valid and binding agreements of Buyer, enforceable in accordance with their terms, except in each case as such enforceability may be limited by the Enforceability Exceptions.

4.3.         No Conflicts.  Except for the Governmental Consents, the execution, delivery and performance by Buyer of this Agreement and the Buyer Ancillary Agreements and the consummation by Buyer of any of the transactions contemplated hereby or thereby does not and will not, with or without notice or the passage of time (a) violate the Organizational Documents of Buyer, (b) violate in any material respect, or result in the creation of any Lien (other than any Permitted Lien) under, any law, judgment, order, or decree to which Buyer or its assets are subject, (c) result in a material breach of, or event of default or the creation of any Lien (other than any Permitted Lien) under, any lease, contract or agreement to which Buyer is a party or to which its assets are subject or (d) require the consent or approval of, or a filing by Buyer with, any Governmental Entity.

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4.4.         Litigation.  There is no Action pending or, to Buyer’s knowledge, threatened against Buyer which would reasonably be expected to adversely affect Buyer’s ability to perform its obligations under this Agreement or the Buyer Ancillary Agreements or otherwise impede, prevent or materially delay the consummation of the transactions contemplated hereby or thereby.

4.5.         Qualification.

(a)           Except as set forth on Schedule 4.5, Buyer is legally, financially and otherwise qualified to acquire the Equity Interests and to own the Acquired Companies and to control and operate the Broadcast Stations under the Communications Laws, including the provisions relating to media ownership and attribution, foreign ownership and control and character qualifications, and, except as set forth on Schedule 4.5, there are no facts or circumstances that would, under the Communications Laws and the existing procedures of the FCC, disqualify Buyer as the owner and operator of the Broadcast Stations or as the transferee of control of the Acquired Companies and the FCC Licenses.

(b)           Except as set forth on Schedule 4.5, no waiver of or exemption from any provision of the Communications Laws and policies of the FCC is necessary for the FCC Consent to be obtained; and, except as set forth on Schedule 4.5, there are no facts or circumstances that might reasonably be expected to (i) result in the FCC’s refusal to grant the FCC Consent or otherwise disqualify Buyer, (ii) materially delay obtaining the FCC Consent or (iii) cause the FCC to impose a material condition or conditions on its granting of the FCC Consent.

4.6.         Projections and Other Information.  Buyer acknowledges that, with respect to any estimates, projections, forecasts, business plans, budget information and similar documentation or information relating to the Acquired Companies, the Stations, the Business and the transactions contemplated hereby that Buyer has received from Sellers, any Acquired Company or any of their respective Affiliates or advisors and that is not expressly set forth in this Agreement, (a) Buyer is not relying on such documentation in making its determination with respect to signing this Agreement or completing the transactions contemplated hereby, (b) there are uncertainties inherent in attempting to make such estimates, projections, forecasts, plans and budgets, (c) Buyer is familiar with such uncertainties, (d) Buyer is taking full responsibility for making its own evaluation of the adequacy and accuracy of all estimates, projections, forecasts, plans and budgets so furnished to it and (e) Buyer does not have, and will not assert, any claim against Sellers, the Acquired Companies, their respective Affiliates or any of its or any of their respective directors, officers, members, managers, employees, Affiliates or representatives, or hold Sellers, the Acquired Companies or any such Persons liable, with respect thereto.  Buyer represents and warrants that none of Sellers, the Acquired Companies nor any of their respective Affiliates, nor any other Person has made any representation or warranty, express or implied, as to the accuracy or completeness of any information regarding the Acquired Companies, the Stations, the Business or the transactions contemplated by this Agreement not expressly set forth in this Agreement.  None of Sellers, the Acquired Companies, any of their respective Affiliates nor any other Person will have or be subject to any liability to Buyer or any other Person resulting from the distribution to Buyer or its representatives or Buyer’s use of, any such information, including any confidential memoranda distributed on behalf of Sellers or the

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Acquired Companies relating to the Acquired Companies or other publications or data room information provided to Buyer or its representatives, or any other document or information in any form provided to Buyer or its representatives in connection with the transactions contemplated hereby.  Notwithstanding anything herein to the contrary, nothing in this Section 4.6 will in any way limit Buyer’s rights (including under Section 8.1(a) and Article 10) with respect to the representations and warranties of Sellers in Article 3.

4.7.         Sufficient Funds.  Buyer currently has or has the ability to obtain, and will have as of the Closing Date, sufficient funds available to pay the Purchase Price in full.

4.8.         No Brokers.  No broker, investment banker, financial advisor or other third party has been employed or retained by Buyer in connection with the transactions contemplated by this Agreement or is or may be entitled to any broker’s, finder’s, financial advisor’s or other similar fee or commission, or the reimbursement of expenses, in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Buyer.

ARTICLE 5
CERTAIN COVENANTS

5.1.         Sellers’ Covenants.  Between the date hereof and the Closing, except as (a) set forth in this Agreement, (b) contemplated by the applicable subsection of Schedule 5.1, or (c) required by applicable Law or the regulations or requirements of any regulatory organization applicable to Sellers or the Acquired Companies, as the case may be, unless Buyer otherwise consents in writing (which request for consent shall, notwithstanding the provisions of Section 12.4, be directed to and promptly considered in accordance with the terms and conditions of this Section 5.1 by the Buyer Principal Liaisons and which consent shall (i) not be unreasonably withheld, conditioned or delayed in the case of clauses (c), (e), (f), (g), (h), (i), (j), (k), (m), (o), (p), (s), (t), (v), (w) or (y), and (ii) which may otherwise be withheld in Buyer’s sole discretion, Sellers shall cause the Acquired Companies to, and the Acquired Companies shall:

(a)           operate in the ordinary course and in all material respects in accordance with the Communications Laws, the FCC Licenses and with all other applicable Laws;

(b)           not cause or permit, or agree or commit to cause or permit, by act or failure to act, any of the FCC Licenses to expire or to be revoked, suspended or adversely modified, or take or fail to take any action that would cause the FCC or any other Governmental Entity to institute proceedings (other than proceedings of general applicability) for the suspension, revocation or adverse modification of any of the FCC Licenses listed on Schedule 3.4(a);

(c)           other than in the ordinary course of business or for the purpose of disposing of obsolete or worthless assets, not (i) sell, lease, license or dispose of or agree to sell, lease, license or dispose of any material assets unless replaced with similar items of substantially equal or greater value and utility or (ii) create, assume or permit to exist any Liens upon their assets, except for Permitted Liens;

(d)           not dissolve, liquidate, merge or consolidate with any other entity;

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(e)           maintain, repair and replace the Tangible Personal Property, including any Tangible Personal Property which has been damaged prior to Closing, and maintain, repair and replace the Real Property, including any improvements thereon, which has been damaged prior to Closing, in each case in the ordinary course of business;

(f)            not cause, permit or propose any material amendments to the Organizational Documents (in each case, as applicable) of any of the Acquired Companies;

(g)           (i) upon reasonable written advance notice, give Buyer and its representatives reasonable access at reasonable, mutually agreed-upon times during normal business hours to the Stations, and furnish Buyer with information relating to the business and operations of the Acquired Companies and the Business that Buyer may reasonably request, provided, however, that such access rights shall not be exercised in a manner that interferes with the business and operations of the Acquired Companies or the Business and (ii) otherwise provide such reasonable assistance and cooperation as may be requested by Buyer from time to time prior to the Closing Date to reasonably facilitate the transition of the business and operations of the Acquired Companies and the Business, including facilities, operations and applicable data, to Buyer upon and effective as of the Effective Time;

(h)           except as otherwise required by Law, not enter into, renew or renegotiate any employment agreement with a Station Employee providing for annual compensation in excess of $100,000, any severance agreement or any labor, or union agreement or plan, including any Collective Bargaining Agreement, that will be binding upon Buyer or any Acquired Company after the Closing;

(i)            not hire or terminate the employment of any Station general manager or any other Station Employee with annual aggregate non-equity compensation, including target bonuses, in excess of $100,000, excluding any terminations for “cause” as reasonably determined by Sellers;

(j)            except in the ordinary course of business or in connection with the Acquired Companies’ obligations with respect to Union Station Employees, not (i) materially increase the compensation or benefits payable to any Station Employee (except for performance and stay bonuses and other compensation to be paid pursuant to Section 2.2(b) as Company Transaction Costs in connection with the consummation of the transactions contemplated by this Agreement), or (ii) modify any severance policy applicable to any Station Employee that would result in any material increase in the amount of severance payable to any such Station Employee (or would materially expand the circumstances in which such severance is payable);

(k)           not incur any indebtedness for borrowed money (other than ordinary course trade payables or ordinary course draw-downs under any revolving credit facilities maintained by Sellers or the Acquired Companies as of the date hereof) or guarantee any such indebtedness or issue or sell any debt securities or warrants or rights to acquire debt securities of any Acquired Company;

(l)            use commercially reasonable efforts to maintain the Stations’ MVPD carriage existing as of the date of this Agreement;

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(m)except for agreements and contracts which can be terminated by the Acquired Companies without penalty upon notice of ninety (90) days or less, not (i) enter into any agreement or contract that would have been a Material Contract were an Acquired Company a party or subject thereto on the date of this Agreement unless such agreement or contract (x) is entered into in the ordinary course of business and (y) does not involve payments by any Acquired Company of greater than $250,000 during any twelve (12) month period, (ii) amend in any material respect any Material Contract unless such amendment (x) is effected in the ordinary course of business and (y) does not increase the amount of payments to be made by any Acquired Company during any twelve (12) month period by $250,000 or more or (iii) terminate or waive any material right under any Material Contract other than in the ordinary course of business (excluding the expiration of any Material Contract in accordance with its terms) (it being understood that if any such entry into, or amendment or termination of any such agreement or contract is permitted pursuant to this Section 5.1(m) as a result of the references to acts taken in the ordinary course of business, but such action would otherwise be prohibited by any other provision of this Section 5.1, then this Section 5.1(m) shall not be interpreted to permit such action without the prior written consent of Buyer as contemplated hereby);

(n)not enter into any Contract constituting a Sharing Agreement with respect to any Broadcast Station;

(o)not change any accounting practices, procedures or methods (except for any change required under GAAP or applicable law) or maintain its books and records, in each case in a manner other than in the ordinary course of business;

(p)not make any acquisition (including by merger, consolidation or acquisition of stock) of the capital stock or a material portion of the assets of any third party;

(q)maintain its qualifications to maintain the FCC Licenses with respect to each Broadcast Station and not take any action that will materially impair such FCC Licenses or such qualifications;

(r)promote the programming of the Stations (both on-air and using third party media) in the ordinary course of business, taking into account inventory availability;

(s)not adopt, enter into or become bound by any new Employee Plan or amend, modify or terminate any Employee Plan, except (i) to comply with applicable Law, (ii) in the ordinary course of business consistent with past practices without any additional post-Closing material liability to the Acquired Companies or (iii) as otherwise contemplated by this Agreement;

(t)keep in full force and effect the material insurance policies set forth on Schedule 3.12 (or other insurance policies comparable in amount and scope);

(u)not (i) issue, sell, pledge, dispose of, grant, encumber, or authorize the issuance, sale, pledge, disposition, or grant, of any Equity Interests or other equity interests in the Acquired Companies or any securities convertible into or exchangeable for or entitling the holder thereof to purchase or receive any Equity Interests or other equity interests in the Acquired Companies, (ii) split, combine or reclassify any Equity Interests or other equity interests in the

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Acquired Companies, (iii) issue or sell any additional interests of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any Equity Interests or other equity interests in the Acquired Companies, or (iv) redeem, purchase or otherwise acquire directly or indirectly any outstanding Equity Interests or other equity interests in the Acquired Companies; provided that nothing herein shall prohibit the Acquired Companies from making cash distributions or dividends to its equity holders;

(v)except as set forth on Schedule 5.1(v), not make or rescind any election relating to Taxes, settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes, or change any of its methods of reporting income or deductions on its Income Tax Returns, or the classifications of its existing property and assets, for any taxable period ending on or after September 30, 2012, in each case, to the extent such action would reasonably be expected to materially and adversely affect Buyer or the Acquired Companies after the Closing;

(w)not (i) enter into or agree or commit to enter into any new Tradeout Agreement relating to a specific Station with a value in excess of $40,000 per Station, and, $200,000 in the aggregate, prior to Closing that will not be fully performed prior to the Closing or (ii) make any guarantee of commercial ratings other than in the ordinary course of business consistent with past practice.

(x)(i) utilize the Program Rights only in the ordinary course of business consistent with past practice and (ii) not sell or otherwise dispose of any such Program Rights;

(y)not extend credit to advertisers other than in the ordinary course of business consistent with past practice;

(z)timely make retransmission consent elections with all MVPDs located in or serving the Stations’ Markets; and

(aa)not agree, commit or resolve to take any actions inconsistent with the foregoing.

5.2.Control and Maintenance of Qualification.

(a)Notwithstanding any other provision set forth in this Agreement, including any provision of this Article 5, Buyer shall not, directly or indirectly, control, supervise or direct the business or operations of the Acquired Companies or the Broadcast Stations prior to the Closing.  Consistent with the Communications Laws, prior to the Closing, control, supervision and direction of the Acquired Companies and the Broadcast Stations prior to the Closing shall remain the responsibility of Sellers as the corporate parents, as applicable, of the Acquired Companies holding the respective FCC Licenses.

(b)Except to the extent set forth on Schedule 4.5 or Schedule 2.7(f), Buyer shall remain qualified under the Communications Laws to be the transferee of control of the Acquired Companies and to become the licensee of the Broadcast Stations as contemplated upon the Closing.  Except as set forth in Schedule 4.5 or Schedule 2.7(f), Buyer shall not enter into or

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commit to become a party to any Sharing Arrangement with respect to a broadcast television station in any Market of a Broadcast Station.

5.3.Restructuring.  Prior to the Closing Date, Sellers shall, and shall cause the Acquired Parent Companies to, effect and consummate the Restructuring.

5.4.Non-Duplication Letters.  Prior to the Closing, Sellers shall use their commercially reasonable efforts to obtain and deliver to Buyer non-duplication letters from each MVPD having 10,000 or more subscribers in a Station’s Market.

ARTICLE 6

JOINT COVENANTS

Buyer and Sellers hereby covenant and agree as follows:

6.1.Confidentiality.  Sellers (or an Affiliate of Sellers) and Buyer (or an Affiliate of Buyer) are parties to a nondisclosure agreement (the “NDA”) with respect to Sellers and the Acquired Companies.  To the extent not already a direct party thereto, each of Sellers and Buyer hereby assumes the NDA and agrees to be bound by the provisions thereof.  Without limiting the terms of the NDA or expanding the obligations thereunder, subject to the requirements of applicable law, all non-public information regarding Sellers, the Acquired Companies, their respective Affiliates and their businesses and properties that is disclosed in connection with the negotiation, preparation or performance of this Agreement (including all financial information provided by Sellers or the Acquired Companies to Buyer) shall be confidential and shall not be disclosed to any other Person, except Buyer’s representatives and lenders for the purpose of consummating the transactions contemplated by this Agreement.

6.2.Announcements.  No party shall, without the prior written consent of the other, issue any press release or make any other public announcement concerning the transactions contemplated by this Agreement, except to the extent that such party is so obligated by Law or any rule or regulation of any securities exchange upon which the securities of such party are listed or traded, in which case such party shall give advance notice to the other, and except that the parties shall cooperate to make a mutually agreeable announcement.

6.3.Consents.  Sellers shall use commercially reasonable efforts to obtain (a) any third party consents required under any Material Contract in connection with the consummation of the transactions contemplated by this Agreement (which shall not require any payment to any such third party) and (b) customary estoppel certificates reasonably acceptable to Buyer under the Real Property Leases listed on Schedule 6.3(b), which shall include each Real Property Lease for a Station’s studio or Tower Lease for a Station’s primary tower or other material tower; provided, however, that the parties acknowledge and agree that such third party consents or estoppel certificates are not conditions to Closing, except for those certain third party consents set forth on Schedule 6.3(a) (the “Required Consents”).

6.4.Employees; Employee Plans.

(a)Schedule 6.4(a)(1) sets forth a list as of the date hereof (which Sellers shall update as of a reasonable time prior to the Closing) showing employee names, positions and

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status for all employees of the Acquired Companies (the “Station Employees”), it being understood that any employee of an Acquired Company whose employment responsibilities relate primarily and substantially to the corporate operations of such Acquired Company or to any Non-Business Subsidiary shall not be deemed a Station Employee for any purpose hereunder.  Each such non-Station Employee is listed on Schedule 6.4(a)(2) which also lists such Person’s title.  None of the Persons listed on Schedule 6.4(a)(2) as non-Station Employees will be an employee of an Acquired Company as of the Closing.

(b)So long as a Non-Union Station Employee is employed by Buyer, Buyer shall provide each Non-Union Station Employee who does not have an employment agreement with the Acquired Companies employee benefits, compensation and severance that are no less favorable to the employee benefits, compensation and severance provided to similarly situated employees of Buyer, provided that, except to the extent included in determining the Net Working Capital Amount or as required by Law, Buyer shall not be obligated to provide credit for past accrued but unused time with respect to sick, personal or vacation leave.  To the extent permitted by Law and notwithstanding anything herein to the contrary, Buyer shall give Non-Union Station Employees full credit for purposes of eligibility waiting periods and vesting and benefit accrual (other than benefit accrual under a defined benefit pension plan) under the employee benefit plans or arrangements or severance practices maintained by the Buyer or its Affiliates in which such Non-Union Station Employees participate for such Non-Union Station Employees’ service with the Acquired Companies.

(c)Notwithstanding anything to the contrary in this Section 6.4, the parties expressly acknowledge and agree that (i) this Agreement is not intended to create a contract between Buyer, Sellers or any of their respective Affiliates on the one hand and any Station Employee on the other hand, and no Station Employee may rely on this Agreement as the basis for any breach of contract claim against Buyer, Sellers or any Acquired Company, (ii) nothing in this Agreement shall be deemed or construed to require any Acquired Company to employ any particular Station Employee for any period after the Closing, and (iii) nothing in this Agreement shall be deemed or construed to limit the Acquired Companies’ rights to terminate the employment of any Station Employee during any period prior to or after the Closing Date.

(d)Schedule 6.4(a) separately identifies each Station Employee who is represented by a labor union (“Union Station Employees”) as of the date hereof (as may subsequently be updated by Sellers pursuant to Section 6.4(a)).  Buyer shall recognize each labor union as the exclusive representative of the specific group of Station Employees that such labor union represents pursuant to the Collective Bargaining Agreement to which it is a party.  Buyer shall assume and thereafter fully satisfy and perform all liabilities, commitments and other obligations set forth in Collective Bargaining Agreements, including all terms and conditions of employment incorporated therein, and any bargaining obligations, contribution requirements and payment requirements arising under the Collective Bargaining Agreements themselves and/or any Taft-Hartley or other collectively bargained benefit plans set forth in Schedule 3.11(a) and 3.11(b), from and after Closing.  Without limiting the generality of the foregoing, Buyer shall provide to those Union Station Employees who are presently covered by the same Employee Plans as the Non-Union Station Employees the same employee benefits, compensation, severance and credit for purposes of eligibility waiting periods and vesting and benefit accrual provided to the Non-Union Station Employees pursuant to Section 6.4(b).

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(e)Prior to the Closing Date, Sellers and Acquired Companies will take the actions set forth on Schedule 6.4(e) with respect to the spin-off of certain Employee Plans (or assets relating thereto) maintained or sponsored by Sellers, the Acquired Companies or any of their respective Affiliates, in each case to become effective immediately prior to the Effective Time.

6.5.Access to and Retention of Records.  Subject to Section 11.7, from and after the Closing Date, Buyer shall, or shall cause the Acquired Companies preserve, in accordance with Buyer’s normal document retention procedures and practices, all books and records of the Acquired Companies and shall provide Sellers a reasonable opportunity to access and obtain copies, at Sellers’ expense, of any such books and records.  In addition to the foregoing, from and after the Closing, Buyer shall afford to Sellers, and their counsel, accountants, and other authorized agents and representatives, at Sellers’ expense, during normal business hours, reasonable access to the employees, books, records and other data relating to the Business or the Acquired Companies in its possession with respect to the periods prior to the Closing, and the right to make copies and extracts therefrom, to the extent that such access may be reasonably required by Sellers (a) to facilitate the investigation, litigation and final disposition of any claims which may have been or may be made against Sellers, (b) for the preparation of Tax Returns and audits and (c) for any other reasonable and proper business purpose, provided in each case that such access does not unreasonably disrupt the Business or the business and operations of Buyer or the Acquired Companies.

6.6.Cooperation.  Buyer shall use commercially reasonable efforts to cooperate with Sellers to release any Liens applicable to the Acquired Companies.  Buyer acknowledges that Sellers may use a portion of the proceeds from the Purchase Price for the repayment of Indebtedness associated with any such Liens.

6.7.Transition Arrangements.  As set forth on Schedule 6.7, for a period of up to nine (9) months following the Closing Date, (a) Buyer and the Acquired Companies will permit Sellers and their Affiliates to continue to occupy facilities owned or leased by the Acquired Companies, in each case (i) to the same extent to which Sellers and their Affiliates occupy such facilities as of the date hereof and (ii) subject to payment of an agreed-upon rental amount and cost-sharing arrangement reflective of the allocated cost structures applicable to those arrangements maintained by Sellers and their Affiliates as of the date hereof with respect to such facilities and (b) unless terminated earlier by Buyer, Sellers and their Affiliates will continue to provide services to Buyer and the Acquired Companies to the same extent to which Sellers and their Affiliates provide such service to the Acquired Companies as of the date hereof, subject to the payment by Buyer and the Acquired Companies of an amount reflective of the allocated cost structures applicable to those arrangements maintained by Sellers and their Affiliates as of the date hereof.

6.8.Interim Reports.  Within forty-five (45) days after the end of each calendar month during the period from the Balance Sheet Date through the Closing, Sellers shall provide to Buyer, with respect to the Acquired Companies, the unaudited balance sheet as of the end of such month and the related combined unaudited statement of operations for such month ended of the Acquired Companies.  Such reports shall be prepared on the same basis as the Financial Statements.  Sellers shall also provide to Buyer weekly pacing reports for each of the Stations

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promptly following the end of each week during the period from the date hereof through the Closing.

6.9.Fulfillment of Conditions.  Without limiting any other obligation of a party expressly set forth herein, Sellers shall use their commercially reasonable efforts to satisfy each of the conditions to the Closing of Buyer set forth in Article 8 (Buyer Closing Conditions), and Buyer shall use its commercially reasonable efforts to satisfy each of the conditions to the Closing of Sellers set forth in Article 7 (Seller Closing Conditions), and each of the parties shall use its commercially reasonable efforts to take or cause to be taken all action necessary or desirable in order to consummate the transactions contemplated by this Agreement as promptly as practicable.

6.10.Title Commitments; Surveys.  Buyer shall have the responsibility to obtain, at its sole option and expense, (a) commitments for owner’s and lender’s title insurance policies on the Owned Real Property and commitments for lessee’s and lender’s title insurance policies for all Real Property that is leased pursuant to a Real Property Lease (collectively, the “Title Commitments”), and (b) an ALTA survey on each parcel of Real Property (the “Surveys”); provided, however, that Sellers shall provide Buyer with any existing Title Commitments and Surveys in its possession.  The Title Commitments will evidence a commitment to issue an ALTA title insurance policy insuring good, marketable and indefeasible fee simple (or leasehold, if applicable) title to each parcel of the Real Property contemplated above for such amount as Buyer directs.  Sellers shall reasonably cooperate with Buyer in obtaining such Title Commitments and Surveys, provided that neither Sellers nor any Acquired Company shall be required to incur any cost, expense or other liability in connection therewith.  If the Title Commitments or Surveys reveal any Lien on the title other than Permitted Liens, Buyer shall notify Sellers in writing of such objectionable matter as soon as Buyer becomes aware that such matter is not a Permitted Lien, and Sellers agree to use commercially reasonable efforts to remove such objectionable matter as required pursuant to the terms of this Agreement.

6.11.No Negotiation.  Until the earlier of the Closing or such time as this Agreement shall be terminated pursuant to Section 12.1, Sellers, the Acquired Companies and their respective directors, officers, investment bankers and agents shall cease any discussions or negotiations with, and shall not, directly or indirectly, solicit, initiate, encourage or entertain any inquiries or proposals from, discuss or negotiate with, provide any nonpublic information to or consider the merits of any inquiries or proposals from any Person (other than Buyer) relating to any business combination transaction involving the Equity Interests, the assets of the Acquired Companies or the Stations (other than in the ordinary course of business or as provided by this Agreement).

6.12.No-Hire.  During the period beginning on the date hereof and ending on the first (1st) anniversary of the Closing Date, neither Sellers nor any of their Affiliates will directly or indirectly, solicit to employ or hire any Station Employee, unless Buyer first terminates the employment of such employee, such employee voluntarily terminates without inducement by Sellers or their Affiliates or Buyer gives its written consent to such employment or offer of employment; provided, however, that Sellers shall be permitted to make a general solicitation for employment not targeted to any Station Employee and shall not be prohibited from employing any such employee pursuant to such a general solicitation.  The time period referred to in this

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Section 6.12 shall be tolled on a day-for-day basis for each day during which any Sellers or their Affiliates participates in any activity in violation of this Section 6.12 so that the Sellers and their Affiliates shall be restricted from engaging in the conduct referred to in this Section 6.14 of this Agreement for the full period contemplated hereby.

6.13.Financial Statements.

(a)Sellers shall deliver to Buyer on or before sixty (60) days after Closing, audited combined financial statements for the Acquired Companies, prepared in accordance with GAAP, for the years ended September 30, 2011, 2012 and 2013 as required by regulations of the Securities Exchange Commission.

(b)Buyer and Sellers will reasonably cooperate with each other in connection with the preparation of the financial statements required pursuant to this Section 6.13 and Buyer further agrees that it will reasonably cooperate with Sellers, including by providing Sellers, after Closing, reasonable access to applicable books and records of the Acquired Companies, to reasonably enable Sellers to prepare combined financial statements for (i) the stub period from the day following the end of the most recent full calendar quarter prior to the Closing Date through the Closing Date and (ii) for the eight (8) calendar quarters that have ended prior to the Closing Date.

6.14.Cooperation in Litigation.  Buyer and Sellers shall (and shall cause their respective Subsidiaries to) reasonably cooperate with each other at the requesting party’s expense in the prosecution or defense of any claim, litigation or other proceeding arising from or related to the conduct of the Business and involving one or more third parties.  The party requesting such cooperation shall pay the reasonable out-of-pocket expenses (excluding internal costs) incurred in providing such cooperation (including reasonable legal fees and disbursements) by the party providing such cooperation and by its Affiliates and its and their officers, directors, employees and agents.

6.15.Termination of Related Party Transactions.  Except as set forth in Section 6.7, Sellers and the Acquired Companies shall terminate, without liability to the Acquired Companies, all Related Party Transactions prior to the Closing.

ARTICLE 7

SELLER CLOSING CONDITIONS

The obligations of Sellers to consummate the Closing hereunder shall be subject to the satisfaction, at or prior to the Closing, of each of the following conditions (unless waived in writing by Sellers):

7.1.Representations and Covenants.

(a)All representations and warranties of Buyer contained in this Agreement shall be true and correct in all material respects as of the date of this Agreement and at and as of the Closing ((i) other than any representation or warranty that is expressly made as of a specified date, which need be true and correct in all material respects as of such specified date only and (ii) except for changes expressly contemplated by this Agreement); except where such failure has

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not resulted, and would not reasonably be expected to result, in a material adverse effect on the ability of Buyer to perform its obligations under this Agreement or any Buyer Ancillary Documents, provided, however, that for purposes of this Section 7.1(a), all materiality or similar qualifiers within such representations and warranties shall be disregarded.

(b)The covenants and agreements that by their terms are to be complied with and performed by Buyer at or prior to the Closing shall have been complied with or performed by Buyer in all material respects.

(c)Sellers shall have received a certificate dated as of the Closing Date from Buyer executed by an authorized officer of Buyer to the effect that the conditions set forth in Sections 7.1(a) and (b) have been satisfied.

7.2.Proceedings.  Neither Sellers nor Buyer shall be subject to any order or injunction from a Governmental Entity, which remains in effect, prohibiting or making illegal the consummation of the transactions contemplated hereby.

7.3.FCC Authorization.  The FCC Consent shall have been granted and shall be in full force and effect, and except to the extent waived by Buyer in accordance with Section 2.6, shall have become a Final Order.

7.4.Hart Scott Rodino.  The HSR Clearance shall have been obtained.

7.5.Deliveries.  Buyer shall have complied with each of its obligations set forth in Section 9.2.

ARTICLE 8

BUYER CLOSING CONDITIONS

The obligations of Buyer to consummate the Closing hereunder shall be subject to satisfaction, at or prior to the Closing, of each of the following conditions (unless waived in writing by Buyer):

8.1.Representations and Covenants.

(a)All representations and warranties of Sellers contained in this Agreement  shall be true and correct as of the date of this Agreement and at and as of the Closing ((i) other than any representation or warranty that is expressly made as of a specified date, which need be true and correct as of such specified date only and (ii) except for changes expressly contemplated by this Agreement), except to the extent that the failure of the representations and warranties of Sellers contained in this Agreement to be so true and correct at and as of the Closing (or in respect of any representation or warranty that is expressly made as of a specified date, as of such date only) has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; provided, however, that for purposes of this Section 8.1(a), all materiality, “Material Adverse Effect” or similar qualifiers within such representations and warranties shall be disregarded.

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(b)The covenants and agreements that by their terms are to be complied with and performed by Sellers at or prior to the Closing shall have been complied with or performed by Sellers in all material respects.

(c)Buyer shall have received a certificate dated as of the Closing Date from Sellers executed by an authorized officer or member of Sellers to the effect that the conditions set forth in Sections 8.1(a) and (b) have been satisfied.

8.2.Proceedings.  Neither Sellers nor Buyer shall be subject to any order or injunction from a Governmental Entity, which remains in effect, prohibiting or making illegal the consummation of the transactions contemplated hereby.

8.3.FCC Authorization.  The FCC Consent shall have been granted and shall be in full force and effect, and except as set forth in Section 2.6, shall have become a Final Order.

8.4.Hart Scott Rodino.  The HSR Clearance shall have been obtained.

8.5.Restructuring.  Sellers and the Acquired Parent Companies, as applicable, shall have effected and consummated the transactions contemplated in connection with the Restructuring.

8.6.Deliveries.  Sellers shall have complied with each of their obligations set forth in Section 9.1.

8.7.Consents.  The Required Consents shall have been obtained and delivered to Buyer.

8.8.No Material Adverse Effect.  Since the date of this Agreement, there shall not have occurred a Material Adverse Effect.

ARTICLE 9

CLOSING DELIVERIES

9.1.Seller Documents.  At the Closing, Sellers shall deliver or cause to be delivered to Buyer:

(a)a good standing certificate issued by the Secretary of State of each Seller’s and each Acquired Company’s jurisdiction of formation;

(b)certified copies of all corporate or limited liability company resolutions necessary to authorize the execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby;

(c)the certificate described in Section 8.1(c);

(d)certificates representing the Equity Interests, in each case duly endorsed or accompanied by duly executed stock powers for transfer to Buyer;

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(e)an affidavit of non-foreign status of each Seller that complies with Section 1445 of the Code in substantially the form attached hereto as Exhibit B;

(f)the Unwind Agreement in accordance with Section 2.6, if applicable;

(g)the Indemnity Escrow Agreement, duly executed by Sellers;

(h)the Organizational Documents for each Seller and each of the Acquired Companies, certified as of a recent date by the Secretary of State of the applicable jurisdiction of organization;

(i)mortgage discharges and UCC termination statements or other appropriate releases, which when filed will release and satisfy any and all Liens (other than Permitted Liens) relating to the Acquired Companies’ assets, the Equity Interests and the Business Subsidiary Equity Interest, together with proper authority to file such termination statements or other releases at and following the Closing; and

(j)Reasonable evidence and documentation that the spin-off of specified Employee Plans has occurred.

9.2.Buyer Documents.  At the Closing, Buyer shall deliver or cause to be delivered to Sellers:

(a)the Purchase Price in accordance with Section 2.2;

(b)a good standing certificate issued by the Secretary of State of Buyer’s jurisdiction of formation;

(c)certified copies of all corporate or other resolutions necessary to authorize the execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby;

(d)the certificate described in Section 7.1(c);

(e)the Unwind Agreement in accordance with Section 2.6, if applicable; and

(f)the Indemnity Escrow Agreement, duly executed by Buyer.

ARTICLE 10

SURVIVAL; INDEMNIFICATION

10.1.Survival.  The representations, warranties and covenants in this Agreement and any agreements required to be performed prior to the Closing, including the Seller Ancillary Agreements and the Buyer Ancillary Agreements, shall survive the Closing for a period of twelve (12) months from the Closing Date whereupon they shall expire and be of no further force or effect (provided that (i) the representations and warranties set forth in Section 3.1 (Organization), Section 3.2 (Authorization), Section 3.3 (No Conflicts), Section 3.4 (Title to Equity Interests), Section 4.1 (Organization) and Section 4.2 (Authorization) shall survive the

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Closing indefinitely, (ii) the representations and warranties in Section 3.9 (Environmental) shall survive for the statute of limitations plus sixty (60) days, and (iii) the covenants and agreements in this Agreement and the Ancillary Documents, to the extent to be performed after the Closing, including the indemnification obligations under this Article 10 and under Sections 11.1(a) and 11.1(b), shall survive the Closing until fully performed, whereupon they shall expire and be of no further force or effect), except that if within such period the Indemnified Party gives the Indemnifying Party written notice of a claim for breach thereof describing in reasonable detail the nature and basis of such claim, then such claim, together with all related indemnification obligations of the applicable party hereto pursuant to this Article 10, shall survive until the earlier of resolution of such claim or expiration of the applicable statute of limitations.

10.2.Indemnification.

(a)Subject to Section 10.2(b), from and after the Closing, Sellers, jointly and severally, shall indemnify and hold harmless Buyer and its Affiliates and each of their respective officers, directors, managers, employees and authorized agents (the “Buyer Indemnified Parties”) from and against any and all Damages incurred by the Buyer Indemnified Parties, whether or not resulting from third party claims, arising out of or resulting from:

(i)any breach by Sellers of their representations and warranties made under this Agreement;

(ii)any default by Sellers of any covenant or agreement set forth in this Agreement;

(iii)the matters described in Section 11.1(a), to the extent set forth therein;

(iv)fines or other liability related to any FCC matters required to be set forth on Schedule 3.4(b);

(v)litigation relating to matters required to be set forth on Schedule 3.14; and

(vi)The operation of the Business and the Acquired Companies prior to Closing other than those items set forth in Sections 10.2(a)(iv) and (v).

(b)Notwithstanding the foregoing or anything else herein to the contrary, after the Closing, (i) Sellers shall have no liability to the Buyer Indemnified Parties under Section 10.2(a) unless the sum of all Damages incurred by any of the Buyer Indemnified Parties with respect to Section 10.2(a) exceeds $500,000 (the “Deductible”), after which time Sellers will be liable for all Damages under Section 10.2(a) only in excess of the Deductible, and (ii) the maximum liability of Sellers under Section 10.2(a) as of any given time shall be an amount equal to the then-current balance of the Indemnity Escrow Fund, it being understood that in the event that the Indemnity Escrow Fund is insufficient to pay any Buyer Indemnified Party any amounts to which such Buyer Indemnified Party would otherwise be entitled pursuant to Section 10.2(a), the Buyer Indemnified Parties shall not be entitled to collect any remaining amounts not satisfied from the Indemnity Escrow Fund, and neither of the Sellers nor any of their respective Affiliates

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shall have any liability for any such deficiency, provided, however, that, in the event the Buyer Indemnified Parties suffer Damages arising out of or resulting from (A) Sellers’ breach of its representations and warranties set forth in Section 3.1 (Organization), 3.2 (Authorization), 3.3 (No Conflicts) or 3.4 (Title to Equity Interests), 3.9 (Environmental),  (B) the matters set forth in 10.2(a)(ii), (C) the matters set forth in Section 10.2(a)(iii), (D) the matters set forth in Section 10.2(a)(iv) and (E) the matters set forth in Section 10.2(a)(v), or (F) the matters set forth in Section 10.2(a)(vi), the Buyer Indemnified Parties shall be entitled, at their option, to seek recourse either from the Indemnity Escrow Fund or directly from Sellers, and any such claim for indemnification shall not be subject to either of clause (i) or clause (ii) of this Section 10.2(b), other than the representations in Section 3.9 (Environmental) and the matters set forth in Section 10.2(a)(vi) which shall be subject to clause (i) of this Section 10.2(b); provided, further, that the maximum aggregate amount recoverable by the Buyer Indemnified Parties from Sellers with respect to any such claims for indemnification as contemplated by the foregoing clauses (A) through (F) shall be an amount equal to the aggregate portion of the Purchase Price received by Sellers hereunder, minus the aggregate amount the Buyer Indemnified Parties have previously recovered from the Escrow Fund with respect thereto; provided, further, that there shall be no limitation on recovery for any claim for intentional fraud.  For purposes of this Article 10, solely for the purpose of calculating the amount of any Damages arising out of or resulting from any breach of any representation or warranty of Sellers contained in this Agreement (and not for determining the existence of any breach of any representation or warranty of Sellers contained in this Agreement), the representations and warranties of Sellers contained in this Agreement shall be deemed to have been made without any qualifications as to materiality or Material Adverse Effect.

(c)From and after the Closing, Buyer shall indemnify and hold harmless each Seller, their respective Affiliates and each of their respective officers, directors, managers, employees and authorized agents (the “Seller Indemnified Parties”) from and against any and all Damages incurred by the Seller Indemnified Parties, whether or not resulting from third party claims, arising out of or resulting from

(i)any breach by Buyer of its representations and warranties made under this Agreement;

(ii)any default by Buyer of any covenant or agreement set forth in this Agreement;

(iii)the matters described in Section 11.1(b), to the extent set forth therein;

(iv)any withdrawal liability assessed against the Sellers or their Affiliates due to a withdrawal (as defined in ERISA Section 4201) from a multiemployer pension plan initiated by the Buyer that occurs after the Closing; or

(v)the operation of Business and the Acquired Companies after the Closing.

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(d)Notwithstanding the foregoing or anything else herein to the contrary, after the Closing, (i) Buyer shall have no liability to the Seller Indemnified Parties under Section 10.2(c) unless the sum of all Damages incurred by any of the Seller Indemnified Parties with respect to Section 10.2(c) exceeds the Deductible, after which time Buyer will be liable for all Damages under Section 10.2(c) only in excess of the Deductible, and (ii) the maximum liability of Buyer under Section 10.2(c) as of any given time shall be an amount equal to $39,400,000; provided, however, that, in the event the Seller Indemnified Parties suffer Damages arising out of or resulting from (w) Buyer’s breach of its representations and warranties set forth in Section 4.1 (Organization) or 4.2 (Authorization), (x) the matters set forth in 10.2(c)(ii), (y) the matters set forth in Section 10.2(c)(iii) or (z) the matters set forth in Section 10.2(c)(iv), any such claim for indemnification shall not be subject to either of clause (i) or clause (ii) of this Section 10.2(d) provided, further, that the maximum aggregate amount recoverable by the Seller Indemnified Parties from Buyer with respect to any such claims for indemnification shall be an amount equal to Purchase Price; provided, further, that there shall be no limitation on recovery for any claim for intentional fraud.  For purposes of this Article 10, solely for the purpose of calculating the amount of any Damages arising out of or resulting from any breach of any representation or warranty of Buyer contained in this Agreement (and not for determining the existence of any breach of any representation or warranty of Buyer contained in this Agreement), the representations and warranties of Buyer contained in this Agreement shall be deemed to have been made without any qualifications as to materiality.

10.3.Procedures with Respect to Third Party Claims.

(a)A party seeking indemnification under this Article 10 (each an “Indemnified Party”) shall give prompt written notice to the party from whom indemnification is sought (each an “Indemnifying Party”) of any demand, suit, claim or assertion of liability by third parties that is subject to indemnification hereunder (a “Claim”), but a failure to give such notice or delaying such notice shall not affect the Indemnified Party’s rights or the Indemnifying Party’s obligations except to the extent the Indemnifying Party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby materially prejudiced and provided that such notice is given within the time period described in Section 10.1.

(b)The Indemnifying Party shall have the right to undertake the defense or opposition to such Claim with counsel selected by it.  In the event that the Indemnifying Party elects not to undertake such defense or opposition, the indemnified party may undertake the defense, opposition, compromise or settlement of such Claim with counsel selected by it at the Indemnifying Party’s cost, except that the Indemnified Party shall not, without the Indemnifying Party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include the giving by the claimant to the Indemnifying Party of a release from all liability in respect of such Claim.

(c)Anything herein to the contrary notwithstanding:

(i)the Indemnified Party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim;

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(ii)the Indemnifying Party shall not, without the Indemnified Party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include the giving by the claimant to the Indemnified Party of a release from all liability in respect of such Claim; and

(iii)in the event that the Indemnifying Party undertakes defense of or opposition to any Claim, the Indemnified Party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the Indemnifying Party and its counsel concerning such Claim and the Indemnifying Party and the Indemnified Party and their respective counsel shall cooperate in good faith with respect to such Claim.

10.4.No Special Damages; Mitigation.  No Indemnifying Party shall be liable to any Indemnified Party for special, indirect, consequential, punitive or exemplary damages, or lost profits, diminution in value or any damages based on any type of multiple of earnings.  Each party agrees to exercise its commercially reasonable efforts to mitigate any Damages in respect of any pending or threatened Claim; provided, however, that no party shall be required to use such efforts if they would be demonstrably detrimental in any material respect to such party.  In the event that an Indemnified Party shall fail to make such efforts to mitigate such Damages, then, notwithstanding anything to the contrary in this Agreement, the Indemnifying Party shall not be required to indemnify such Indemnified Party or any other Indemnified Party to the extent of any Damages that reasonably could have been avoided if such Indemnified Party or other Indemnified Party had made such efforts.

10.5.Offset.  The amount of any Damages indemnifiable by any Indemnifying Party to any Indemnified Party pursuant to this Article 10 will be reduced to reflect (a) the value of any net Tax benefit (whether monetary or otherwise) that is actually realized in the taxable year such Damages are incurred or the two succeeding taxable years, directly or indirectly, by the Indemnified Party as a result of such Damages and (b) any amount actually recovered or recoverable by the Indemnified Party under insurance policies or otherwise with respect to such Damages.  The amount of any claims for indemnification under this Agreement shall be (i) determined without duplication of recovery by reason of any event giving rise to Damages constituting a breach of more than one representation, warranty, covenant or agreement and (ii) reduced if and to the extent the matter giving rise to the indemnification was taken into account in calculating the Final Adjustment Amount pursuant to Section 2.4.

10.6.Treatment of Indemnity Benefits.  All payments made by Sellers or Buyer, as the case may be, to or for the benefit of the other pursuant to any indemnification obligations under this Agreement shall be treated as adjustments to the Purchase Price for Tax purposes and such agreed treatment shall govern for purposes of this Agreement.

10.7.No Claims for Post-Closing Tax Periods.  Notwithstanding anything to the contrary in this Agreement, the Buyer Indemnified Parties shall not have the right to indemnification under this Agreement for any Damages to the extent such Damages are based on Taxes (a) attributable to taxable periods (or portions thereof) beginning after the Closing Date, (b) that are due to the unavailability in any taxable period (or portion thereof) beginning after the Closing Date of any net operating losses, credits, or other Tax attribute from a taxable period (or portion thereof) ending on or prior to the Closing Date, (c) that result from any transaction on the

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Closing Date out of the ordinary course of business or (d) that result from Buyer’s breach of any of the covenants contained in Article 11.

10.8.Exclusive Remedies.  Buyer and Sellers acknowledge and agree that, if the Closing occurs, the indemnification provisions of this Article 10 shall be the sole and exclusive remedies of Buyer and Sellers for any breach of the representations or warranties or nonperformance of or default under any covenants or agreements of Buyer or Sellers contained in this Agreement or any Buyer Ancillary Agreements or Seller Ancillary Agreements; provided, however, that nothing contained in this Agreement shall relieve or limit the liability of any party for Damages arising out of or resulting from such party’s fraud in connection with the transactions contemplated by this Agreement, the Seller Ancillary Agreements or the Buyer Ancillary Agreements or limit the availability of equitable relief, including specific performance, to the extent provided for in this Agreement.

10.9.Pre-Closing Knowledge.  The right to indemnification or any other remedy based on representations, warranties, covenants and agreements in this Agreement, any Seller Ancillary Agreement or Buyer Ancillary Agreement shall not be affected by any investigation conducted at any time, or any knowledge capable of being acquired at any time, whether before or after the execution and delivery of this Agreement, with respect to the accuracy or inaccuracy of or compliance with, any such representation, warranty, covenant or agreement.

ARTICLE 11

TAX MATTERS

11.1.Tax Indemnity.

(a)Sellers hereby agree to indemnify Buyer and each Acquired Company and hold them harmless from and against any loss, claim, liability, expense, or other damage attributable to (i) all Taxes of the Acquired Companies arising with respect to a Tax period, or portion thereof, ending on or before the Closing Date (a “Pre-Closing Tax Period”) to the extent such Taxes exceed the amount of Taxes reflected as a liability on the books of the Acquired Companies; (ii) all Taxes of any member (which is not an Acquired Company) of an affiliated, consolidated, combined or unitary group of which any Acquired Company (or any predecessor of any of the foregoing) is or was a member on or prior to the Closing Date and for which any Acquired Company is liable, including pursuant to Treasury Regulation §1.1502-6 or any analogous or similar state, local, or non-U.S. law or regulation to the extent such Taxes exceed the amount of Taxes reflected as a liability on the books of the Acquired Companies; (iii) any and all Taxes of any Person (other than an Acquired Company) imposed on any Acquired Company as a transferee or successor, by contract or pursuant to any law, rule, or regulation, which Taxes relate to an event or transaction occurring before the Closing and (iv) a breach by Sellers of any representation or warranty contained in Section 3.5 hereof.

(b)Buyer hereby agrees to indemnify Sellers against all Taxes arising with respect to a Tax period, or portion thereof, beginning after the Closing Date (a “Post-Closing Tax Period”).

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(c)Anything in this Agreement notwithstanding, any Claim for indemnity from Sellers under Section 11.1(a) shall, at the option of Buyer, be paid either out of the Indemnity Escrow Fund or shall be paid proportionately by Sellers, but in no event shall the obligation of a Seller to make any such payment exceed the amount of the Purchase Price received by such Seller for such Seller’s equity interests in the Acquired Parent Companies.

(d)Anything in this Agreement notwithstanding, the provisions of this Article 11, other than Section 11.11 (which shall not expire) shall continue in effect until the expiration of the applicable statutes of limitations plus sixty (60) days for Taxes included in Pre-Closing Tax Periods (after taking into all extensions with respect to such Pre-Closing Tax Periods) at which time such obligations shall expire and be of no further force or effect.

11.2.Straddle Period Allocation.  In the case of any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”), the amount of any Taxes (other than Property Taxes) and Tax refunds (other than Property Tax refunds) of the Acquired Companies for the portion of the Straddle Period that relates to the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of and including the Closing Date (with exemptions, allowances or deductions that are calculated on an annual basis (including depreciation and amortization deductions) apportioned between the Pre-Closing Tax Period and the portion of such Straddle Period after the Pre-Closing Tax Period based on the number of days in each such period), and the amount of any real property, personal property, ad valorem or similar Taxes of the Acquired Companies (“Property Taxes”) and any Property Tax refunds for the portion of the Straddle Period that relates to the Pre-Closing Tax Period shall be deemed to be the amount of such Property Taxes or Property Tax refunds for the entire Straddle Period, multiplied by a fraction, the numerator of which is the number of days in the Straddle Period ending on the Closing Date, and the denominator of which is the number of days in such Straddle Period.  For the avoidance of doubt, no election shall be made under Treasury Regulations Section 1.1502-76(b)(2)(ii) to ratably allocate income with respect to the Acquired Companies or the transactions or matters contemplated herein.

11.3.Tax Returns.  Except as otherwise provided in Section 11.8:

(a)Sellers shall prepare and timely file (taking into account all valid extensions), or shall cause to be prepared and timely filed (taking into account all valid extensions), all Income Tax Returns of the Acquired Companies covering a taxable period ending on or prior to the Closing Date with an initial due date (taking into account all applicable extensions) after the Closing Date (each, a “Pre-Closing Tax Return”), and each such Pre-Closing Tax Return shall be prepared in a manner consistent with past custom and practice of the Acquired Companies in filing their income Tax Returns.  For purposes of calculating the Tax liability for a Pre-Closing Tax Period, (i) all Company Transaction Costs of the Acquired Companies shall be deemed to have accrued on or before the Closing Date and treated as deductions on any applicable Pre-Closing Tax Return, (ii) the Acquired Companies shall timely and properly make an election under Revenue Procedure 2011-29 to deduct seventy percent (70%) of any success-based fees as defined in Treasury Regulation Section 1.263(a)-5(f) incurred by the Acquired Companies in connection with the transactions contemplated by this Agreement (“Deductible Success-Based Fees”), and (iii) carry back, to the maximum extent permitted by applicable Law, any net operating losses of the Acquired Companies attributable to

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any taxable period ending on or before the Closing Date.  Sellers shall provide a copy of each such Pre-Closing Tax Return, together with all supporting documentation and workpapers, to Buyer for Buyer’s review and reasonable comment at least thirty (30) days prior to the due date (taking into account all valid extensions) for filing such Pre-Closing Tax Return, and Sellers shall include any reasonable comments provided in writing by Buyer to Sellers at least fourteen (14) days prior to the due date (taking into account all valid extensions) for filing such Pre-Closing Tax Return; provided, however, that in the case of a Pre-Closing Tax Return for which the filing deadline (including extensions) is within thirty (30) days after the Closing Date, the Sellers shall (x) provide a copy of such Pre-Closing Tax Return to Buyer for Buyer’s review and reasonable comment at least ten (10) days prior to the due date (including extensions) and (y) include any reasonable comments provided by Buyer to Sellers at least five (5) days prior to such due date (including extensions).  To the extent such Taxes are an obligation of Sellers pursuant to Section 11.1(a), Sellers shall pay to the Acquired Companies the amount of Tax owed within the time period specified in Section 11.3(c).

(b)Buyer shall prepare and timely file (taking into account all valid extensions), or shall cause to be prepared and timely filed (taking into account all valid extensions), all Tax Returns of the Acquired Companies covering a Straddle Period (each, a “Straddle Tax Return”), and each such Straddle Tax Return shall be prepared in a manner consistent with past custom and practice except as otherwise required by applicable Law or fact.  Buyer shall provide a copy of each such Straddle Tax Return, together with all supporting documentation and workpapers, to Sellers for Sellers’ review and reasonable comment at least thirty (30) days prior to the due date (taking into account all valid extensions) for filing such Straddle Tax Return, and Buyer shall include any reasonable comments provided in writing by Sellers to Buyer at least fourteen (14) days prior to the due date (taking into account all valid extensions) for filing such Straddle Tax Return; provided, however, that in the case of a Straddle Tax Return for which filing deadline (including extensions) is within thirty (30) days after the Closing Date, Buyer (i) shall in good faith attempt (but shall not have any obligation) to provide a copy of such Straddle Tax Return to Sellers for Sellers’ review and (ii) does not have any obligation to accept any of Sellers’ comments with respect to such Straddle Tax Return.  Subject to the indemnification obligations of Sellers pursuant to Section 11.1(a), the Acquired Companies, as applicable, shall be responsible for timely paying (taking into account all valid extensions) all Taxes reflected on a Straddle Tax Return to the applicable Taxing Authority.

(c)To the extent Taxes reflected on a Pre-Closing Tax Return or Straddle Tax Return are the obligation of Sellers pursuant to Section 11.1(a), Sellers will pay to Buyer the amount of Taxes reflected on such Pre-Closing Tax Return or Straddle Tax Return, as applicable, that are the obligation of Sellers pursuant to Section 11.1(a) within five (5) Business Days after the earlier of (i) a written request by Buyer, or (ii) the due date (including extensions of such Pre-Closing Tax Return or Straddle Tax Return.

(d)For the avoidance of doubt, the term Pre-Closing Tax Return and Straddle Tax Return shall not include, and this Section 11.3 shall not apply to, any Tax Return that is not required under applicable Law to be filed by the Acquired Companies, such as the consolidated U.S. federal income tax return of the Allholdco affiliated group.

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(e)If requested by Sellers, Buyer shall provide Sellers with executed powers of attorney on IRS FORM 2848 and appropriate powers of attorney for state and local tax filing authorizing a designated representative of Sellers to sign and file the Pre-Closing Tax Returns, otherwise, Buyer agrees to sign and file the Pre-Closing Tax Returns.

11.4.Post-Closing Actions.  Buyer shall not, and shall not cause or permit any of its Affiliates (including following the Closing, for the avoidance of doubt, the Acquired Companies) to (a) amend or re-file any Tax Return of the Acquired Companies that covers a Pre-Closing Tax Period or any Tax Return that was prepared and filed pursuant to Section 11.3 or file any Tax Return of the Acquired Companies with an initial due date on or before the Closing Date, (b) take any action relating to Taxes or that could create a Tax liability on the Closing Date (other than as expressly contemplated by this Agreement) that is outside the ordinary course of business, (c) make any Tax election that has retroactive effect to any Pre-Closing Tax Period, (d) voluntarily initiate any contact with any Taxing Authority with respect to any Taxes or Tax Returns of the Acquired Companies that were originally due on or before the Closing Date or (e) carryback any net operating losses to a Pre-Closing Tax Period.  Sellers shall be entitled to prepare and file amended Tax Returns for the Acquired Companies relating to Pre-Closing Tax Periods, including seeking Tax refunds, and Buyer shall fully cooperate with Sellers in filing such amended Tax Returns and, where required, have an appropriate officer sign such amended Tax Returns.

11.5.Tax Contests.

(a)Buyer shall notify Sellers in writing within ten (10) Business Days of receipt by Buyer (or any Buyer Indemnitee) of written notice of any pending or threatened audits, adjustments, claims, examinations, assessments or other administrative or judicial proceedings with the purpose or effect of re-determining Taxes of or with respect to the Acquired Companies (including any administrative or judicial review of any claim for refund) for which Sellers may be required to provide indemnification pursuant to this Agreement (a “Tax Contest”), and shall provide Sellers with a copy of any such written notice.  The failure of Buyer to provide a notification described in this Section 11.5 shall not release Sellers from their obligations hereunder except to the extent, and only to the extent, that Sellers are prejudiced as a result of such failure.

(b)Sellers shall have the right to control and defend the conduct of any Tax Contest covering any taxable period ending on or prior to the Closing Date including the ongoing IRS audit and administrative proceeding of Perpetual Corporation and its subsidiaries for the tax years ending September 30, 2005 — 2008, (a “Pre-Closing Tax Contest”) with counsel (including, for the avoidance of doubt, accountants and outside experts) of its choice; provided, however, that (i) Sellers shall keep Buyer reasonably informed regarding the progress and substantive aspects of the Pre-Closing Tax Contest, (ii) Buyer may retain separate co-counsel at its sole cost and expense, and participate in the defense of the Pre-Closing Tax Contest, including having an opportunity to review and reasonably comment on any written materials prepared in connection with such Pre-Closing Tax Contest and the right to attend and participate in any conferences relating thereto and (iii) Sellers shall be entitled to settle or consent to the entry of any Order or other similar determination or finding with respect to such Pre-Closing Tax Contest without the prior written consent of Buyer if such settlement, Order or determination

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does not result in an adverse adjustment to a Tax liability of the Acquired Companies for a Post-Closing Tax Period; however, if such settlement, Order or determination would result in an adverse adjustment to a Tax liability of the Acquired Companies for a Post-Closing Tax Period, Sellers cannot enter into such settlement, Order or determination without the prior written consent of Buyer (which consent shall not be unreasonably withheld, conditioned or delayed).

(c)Buyer shall have the right to control and defend (i) any Tax Contest covering any Straddle Period, (ii) any Tax Contest that is not a Pre-Closing Tax Contest and (iii) any Pre-Closing Tax Contest for which Sellers have not assumed its right to control and defend such Pre-Closing Tax Contest (each, an “Other Tax Contest”) with counsel (including, for the avoidance of doubt, accountants) of its choice, provided, however, that, with respect to any Tax items in the Other Tax Contest for which the resulting Tax liability Sellers would be required to provide indemnification pursuant to this Agreement, (x) Buyer shall keep Sellers reasonably informed regarding the progress and substantive aspects of such Tax items in the Other Tax Contest, (y) Sellers may retain separate co-counsel at its sole cost and expense, and participate in the defense of such Tax items in the Other Tax Contest, including having an opportunity to review and reasonably comment on any written materials prepared in connection with such Tax items in the Other Tax Contest and the right to attend and participate in any conferences relating thereto and (z) Buyer will not settle or consent to the entry of any Order or other similar determination or finding with respect to such Tax items in the Other Tax Contest without the prior written consent of Sellers (which consent shall not to be unreasonably withheld, conditioned, or delayed).

(d)For the avoidance of doubt, the term Tax Contest shall not include, and this Section 11.5 shall not apply to, any audits, adjustments, claims, examinations, assessments or other administrative or judicial proceedings with the purpose or effect of re-determining Taxes of or with respect to any Tax Return of the Allholdco affiliated group.

(e)Buyer shall provide Sellers with all powers of attorney on IRS FORM 2848 necessary to permit Sellers and Sellers’ representative the authority to conduct the Pre-Closing Tax Contests.

11.6.Refunds.  The amount or economic benefit of any Tax refund (whether in cash or as a credit against or offset to any Tax) in respect of any Tax of the Acquired Companies attributable to any Pre-Closing Tax Period received by Buyer, the Acquired Companies or any of their respective Affiliates shall be for the account of Sellers, to the extent such refund exceeds the amount of the refund of such Taxes reflected as an asset on the books of the Acquired Companies which was included as an asset in the Final Net Working Capital Amount, and the recipient thereof shall pay such amount (including any interest received thereon) over to the Sellers within ten (10) days after any such refund is received, credited or applied as an offset, as the case may be.  Buyer shall elect not to carry any loss, credit or other Tax benefit item from a taxable period (or portion thereof) that begins after the Closing Date back to a Pre-Closing Tax Period.

11.7.Cooperation.  Each of Buyer and Sellers, and each of their respective Affiliates, shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns of or with respect to the Acquired Companies and/or during the

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course of any audit, litigation or other proceeding with respect to Taxes of or attributable to the Acquired Companies.  Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information that are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.  Each of Sellers and Buyer agrees, and following the Closing, Buyer agrees to cause the Acquired Companies, (i) to retain all books and records with respect to Tax matters pertaining to the Acquired Companies relating to any taxable period beginning on or before the Closing Date until the expiration of the applicable statute of limitations (and, to the extent notified by Buyer, any extensions thereof) of the respective taxable periods; shall provide copies of the foregoing to Buyer upon Buyer’s request; and shall abide by all record retention agreements entered into with any Taxing Authority, and (ii) to give the other Party (and following the Closing, Buyer agrees to cause the Acquired Companies to give the Sellers) reasonable written notice prior to transferring, destroying or discarding any such books and records and, on receipt of such notice, if the other Party so requests, Sellers or Buyer shall, as applicable, allow the other Party to take possession of such books and records.  Buyer and Sellers agree that Sellers shall be entitled to retain copies of the books and records of the Acquired Companies which they believe are appropriate for the filing of Tax Returns and defending Tax Contests as described in this Article 11.  Buyer and Sellers further agree, upon request, to use Commercially Reasonable Efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the transactions contemplated hereby).

11.8.Transfer Taxes.  Buyer and Sellers shall each be responsible for the payment of fifty percent (50%) of all governmental Taxes, fees and charges applicable to the transfer of the Equity Interests under this Agreement (including sales, use and real property transfer taxes, stamp and stock transfer taxes and the costs of recording or filing all applicable conveyance instruments) (collectively, “Transfer Taxes”).  At Buyer’s expense, Sellers will cooperate in Buyer’s preparation, execution and filing of all Tax Returns regarding Transfer Taxes and in seeking or perfecting any available exemption from Transfer Taxes.

11.9.Section 338(h)(10) Elections.

(a)Each of Allholdco and Buyer intend for the purchase and sale of the interests in Charleston TV to qualify as a “qualified stock purchase” within the meaning of Treasury Regulations Section 1.338(h)(10)-1(c).  Allholdco and Buyer shall make a joint election under Section 338(h)(10) of the Code and under any comparable provision of applicable state, local, and foreign Law with respect to Buyer’s purchase of the interests in Charleston TV (collectively, the “Section 338(h)(10) Elections”). Buyer and Allholdco shall take all necessary steps and cooperate in good faith, including the exchange of information, to effect and preserve valid and timely a Section 338(h)(10) Election.  Except as otherwise required by applicable Law, each of Allholdco and Buyer agrees that (i) it shall, and shall cause each of its Affiliates, to report, act and file all Tax Returns in all respects and for all purposes consistent with a Section 338(h)(10) Election and (ii) it will not, and will not permit its Affiliates to, take any position that is inconsistent with the Section 338(h)(10) Election.

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(b)At least three (3) Business Days prior to the Closing Date, Buyer shall prepare and deliver to Allholdco an Internal Revenue Service Form 8023, Elections Under Section 338 for Corporations Making Qualified Stock Purchases, and any corresponding forms under comparable provisions of applicable state, local or foreign tax Law, in substance reasonably satisfactory to Allholdco (collectively, the “Section 338(h)(10) Election Forms”). At the Closing, Allholdco shall deliver to Buyer such Section 338(h)(10) Election Forms, duly executed.  Allholdco authorizes Buyer to file each Section 338(h)(10) Election Form with the appropriate Taxing Authority on behalf of Allholdco and Buyer.  Promptly following each such filing, Buyer shall provide Allholdco with a copy of such filed Section 338(h)(10) Election Forms.  As reasonably requested from time to time by Buyer, Allholdco shall assist Buyer in, and shall provide the necessary information to Buyer, in connection with the preparation of any other forms and documentation required to effect valid and timely Section 338(h)(10) Elections.

11.10.Purchase Price Allocations.

(a)Within one hundred eighty (180) days after the Closing, Buyer shall deliver to Allholdco an allocation schedule (the “Section 338 Allocation Schedule”) allocating the “aggregate deemed sales price” and the “adjusted grossed-up basis” (as defined under applicable Treasury Regulations) that results from the Section 338(h)(10) Elections among the assets of Charleston TV in accordance with Sections 338 and 1060 of the Code and the Treasury Regulations promulgated thereunder.

(b)The Section 338 Allocation Schedule (the “Allocation Schedule,”) delivered by Buyer shall become final and binding upon Buyer and Allholdco on the thirtieth (30th) day following the date that such Allocation Schedule was delivered by Buyer to Allholdco, unless prior to such date Allholdco notifies Buyer of any reasonable objections to such Allocation Schedule (an “Allocation Schedule Notice of Disagreement”).  An Allocation Schedule Notice of Disagreement shall specifically set forth all of Allholdco’s disputed items to the applicable Allocation Schedule, together with Allholdco’s proposed changes thereto, including an explanation in reasonable detail of the basis on which Allholdco proposes such changes.  If Allholdco has delivered a timely Allocation Schedule Notice of Disagreement with respect to an Allocation Schedule, then Buyer and Allholdco shall use their good faith efforts to reach agreement on the disputed items to determine the final and binding Allocation Schedule.  If all of Allholdco’s disputed items with respect to an Allocation Schedule have not been resolved by Buyer and Allholdco by the sixtieth (60th) day following the date that Buyer receives the Allocation Schedule Notice of Disagreement with respect to such Allocation Schedule, then the parties shall have no further obligation under this Section 11.10(b), and each party shall make its own determination of such allocation with respect to such disputed items.

(c)Any adjustment of the Purchase Price, and to any other items of consideration, cost or expense taken into account in the Allocation Schedules for U.S. federal income tax purposes, will be allocated in a manner consistent with the Allocation Schedules that has become final and binding pursuant to this Section 11.10.  Except as otherwise required by applicable Law, (i) each of Buyer and Allholdco shall, and shall cause each of its Affiliates, to report, act and file all Tax Returns in all respects and for all purposes consistent with the Allocation Schedules determined to be final and binding pursuant to this Section 11.10 and

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(ii) each of Buyer and Allholdco will not, and will not permit of any of its Affiliates to, take any position that is inconsistent with such final and binding Allocation Schedules.

11.11.Tax Treatment of Indemnity Payments.  Each of Buyer and Allholdco agree that any indemnification payments made under this Agreement shall be treated as Purchase Price adjustments for U.S. federal income tax purposes (and state, local, and foreign Tax purposes where applicable).

11.12.Consolidated Returns for Periods Through the Closing Date.  For the avoidance of doubt, for U.S. federal income Tax purposes, Allholdco shall include all items of income, gain, loss, deduction or credit of Charleston TV and its Subsidiaries that are Acquired Companies for all Tax periods ending on or before the Closing Date in the Allholdco affiliated group’s consolidated U.S. federal income Tax Return, subject to indemnification by Buyer as may be herein provided.  Buyer and Charleston TV shall furnish Tax information to Allholdco as necessary or helpful with respect to the foregoing.

11.13.Intentionally Omitted.

11.14.Conflict.  In the event of conflict between any of the provisions of this Article 11 and any other provision of this Agreement, the provisions of this Article 11 shall control.

ARTICLE 12

TERMINATION AND REMEDIES

12.1.Termination.  Subject to Section 12.3, this Agreement may be terminated prior to the Closing as follows:

(a)by mutual written agreement of Buyer and Sellers;

(b)by written notice from Buyer to Sellers if (i) Buyer is not in material breach of its obligations under this Agreement, (ii) Sellers breach their representations or warranties, or default in the performance of their covenants, contained in this Agreement and (iii) all such breaches and defaults of Sellers that are not cured within the Cure Period would prevent the conditions to the obligations of Buyer set forth in Section 8.1 from being satisfied;

(c)by written notice from Sellers to Buyer if (i) Sellers are not in material breach of their obligations under this Agreement, (ii) Buyer breaches its representations or warranties, or defaults in the performance of its covenants, contained in this Agreement and (iii) all such Buyer breaches and defaults that are not cured within the Cure Period would prevent the conditions to the obligations of Sellers set forth in Section 7.1 from being satisfied; provided, however, that no Cure Period shall apply to Buyer’s obligation to pay the Purchase Price at the Closing; or

(d)by written notice from Buyer to Sellers, or from Sellers to Buyer, if the Closing does not occur by the first anniversary of the date hereof (such date, the “Outside Date”), unless the Closing has not occurred by such date as a result of a material breach of this Agreement by the party providing such notice of termination; provided, however, that if, as of the Outside Date, all conditions to this Agreement have been satisfied or waived (other than

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those that are to be satisfied by action taken at the Closing) other than the condition that the FCC Consent shall have become a Final Order (as set forth in Sections 7.3 and 8.3), then either Buyer or Sellers, may, by written notice to the other, elect to extend the Outside Date by a period of up to sixty (60) days so as to allow the FCC Consent to become a Final Order.

12.2.Cure Period.  Each party shall give the other party prompt written notice upon learning of any breach or default by the other party under this Agreement, and such notice shall include a description of the breach.  The term “Cure Period” as used herein means a period commencing on the date Buyer or Sellers receive from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) calendar days thereafter or (ii) five (5) Business Days after the day otherwise scheduled for the Closing; provided, however, that if the breach or default is non-monetary and cannot reasonably be cured within such period but can be cured before the date five (5) Business Days after the scheduled Closing Date, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the date five (5) Business Days after the scheduled Closing Date and notwithstanding anything to the contrary contained herein, the Closing shall occur, subject to the satisfaction of the Closing conditions set forth herein, not later than such fifth (5th) Business Day after the scheduled Closing Date.

12.3.Termination and Survival.  Subject to Sections 12.4, 12.5 and 12.6, the termination of this Agreement shall not relieve any party of any liability for a breach or default under this Agreement that occurred prior to the date of termination.  Notwithstanding anything contained herein to the contrary, Article 1 (Definitions; Interpretation), Section 6.1 (Confidentiality), this Section 12.3, Section 12.5 (Liquidated Damages), Section 12.6 (Limitation on Seller Damages) and Article 13 (Miscellaneous) shall survive any termination of this Agreement.

12.4.Specific Performance.  The parties hereto acknowledge and agree that the parties hereto would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached and that any non-performance or breach of this Agreement by any party hereto could not be adequately compensated by monetary damages alone and that the parties hereto would not have any adequate remedy at law.  Accordingly, in addition to any other right or remedy to which any party hereto may be entitled, at law or in equity (including monetary damages), such party shall be entitled to enforce any provision of this Agreement by a decree of specific performance and to temporary, preliminary and permanent injunctive relief, subject to obtaining any required Governmental Consents, to prevent breaches or threatened breaches of any of the provisions of this Agreement without posting any bond or other undertaking.  Without limiting the generality of the foregoing, the parties hereto agree that the party seeking specific performance shall be entitled to enforce specifically (a) a party’s obligations under Section 2.7 and (b) a party’s obligation to consummate the transactions contemplated by this Agreement (including the obligation to consummate the Closing and pay the Purchase Price), if the conditions set forth in Article 7 or 8, as applicable, have been satisfied (other than those conditions that by their nature are to be satisfied at the Closing) or waived.  In addition to the foregoing, the prevailing party under this Agreement or any Ancillary Document shall be entitled to prompt payment on demand from the other party of the reasonable attorneys’ fees and costs incurred by the prevailing party.  Notwithstanding anything in this Agreement to the contrary, if the Closing occurs, Article 10

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(Survival; Indemnification) shall govern with respect any Damages incurred by any Seller Indemnified Party or Buyer Indemnified Party.

12.5.Liquidated Damages.

(a)If Sellers terminate this Agreement pursuant to Section 12.1(c), then within two (2) Business Days following the delivery to Buyer of notice of such termination in accordance with the terms of this Agreement, including any Cure Period, Buyer shall pay to Sellers, by wire transfer of immediately available funds to an account designated by Sellers in writing, cash in an amount equal to $39,400,000 (the “Liquidated Damages Amount”).  In the event of such a termination, Sellers shall, in addition, be entitled to prompt payment on demand from Buyer of the reasonable attorneys’ fees and costs incurred by them in enforcing their rights under this Agreement.  Buyer acknowledges and agrees that the payment of the Liquidated Damages Amount as set forth herein shall constitute payment of liquidated damages and not a penalty and that such Liquidated Damages Amount is reasonable in light of the substantial but indeterminate harm anticipated to be caused by Buyer’s material breach or default under this Agreement, the difficulty of proof of loss and damages, the inconvenience and non-feasibility of otherwise obtaining an adequate remedy and the value of the transactions to be consummated hereunder.

(b)For the avoidance of doubt, the parties hereto expressly acknowledge and agree that this Section 12.5 in no way limits or restricts Sellers’ ability to exercise their rights to specific performance pursuant to Section 12.4 at any time prior to the termination of this Agreement in accordance with its terms.

12.6.Limitation on Seller Damages.  If Buyer terminates this Agreement pursuant to Section 12.1(b), then the aggregate amount of losses and damages for which Sellers shall be liable to Buyer in the event of any breach or default by Sellers under this Agreement that occurred prior to the date of termination shall not exceed an amount equal to the Liquidated Damages Amount.

ARTICLE 13

MISCELLANEOUS

13.1.Expenses.  Except as may be otherwise specified herein, each party shall be solely responsible for all costs and expenses incurred by it in connection with the negotiation, preparation and performance of and compliance with the terms of this Agreement.  All governmental fees and charges applicable to any requests for Governmental Consents shall be paid one-half by Sellers and one-half by Buyer, except that if more than one HSR Act filing is necessary because a party has more than one ultimate parent entity, then such party shall pay the HSR Act filing fees for any additional filings.  At Buyer’s expense, Sellers will cooperate in Buyer’s preparation, execution and filing of all Tax Returns regarding Transfer Taxes and in seeking or perfecting any available exemption from Transfer Taxes.  Each party is responsible for any commission, brokerage fee, advisory fee or other similar payment that arises as a result of any agreement or action of it or any party acting on its behalf in connection with this Agreement or the transactions contemplated hereby.

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13.2.Further Assurances.  After the Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments of conveyance and assumption and take such other actions as may reasonably be necessary in order to more effectively consummate the transactions contemplated hereby.

13.3.Assignment.  Neither party may assign this Agreement without the prior written consent of the other party hereto, provided, however, that Buyer may assign its rights hereunder to an Affiliate of Buyer upon written notice to Sellers, provided that (i) any such assignment does not delay the processing of the FCC Applications, the grant of the FCC Consent, the HSR Clearance or the Closing, (ii) any such assignee shall deliver to Sellers a written instrument of assumption with respect to this Agreement pursuant to which such assignee shall (x) make to Sellers the representations and warranties contained in Article 4 with respect to such assignee and (y) covenant to Sellers to observe, satisfy, discharge and perform the covenants of Buyer set forth in this Agreement and (iii) Buyer shall remain liable for all of its obligations hereunder (including those assigned to such assignee).  With respect to any assignment permitted or required under this Section 13.3, (i) any such assignee shall deliver to Sellers a written instrument of assumption with respect to this Agreement in which such assignee (x) shall make to Sellers the representations and warranties contained in Article 4 of this Agreement with respect to such assignee and (y) shall covenant to Sellers to observe, satisfy, discharge and perform the covenants of Buyer set forth in this Agreement and (ii) Buyer shall remain liable for all of its obligations hereunder (including those assigned to such assignee), including the payment of the Purchase Price pursuant to Section 2.2 hereof.  The terms of this Agreement shall bind and inure to the benefit of the parties’ respective successors and any permitted assigns, and no assignment shall relieve any party of any obligation or liability under this Agreement.

13.4.Notices.  Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or confirmed facsimile transmission or confirmed delivery by a nationally recognized overnight courier service, and shall be addressed as follows (or to such other address as any party may request by written notice):

if to Sellers: Barbara B. Allbritton 2970 Lazy Lane Houston, TX 77019 Fax: (713) 520-7892 Robert L. Allbritton 3124 Q Street NW Washington, D.C. 20007 Fax: (202) 462-5989 The Estate of Joe L. Allbritton 5615 Kirby Drive, Suite 650 Houston, TX 77005 Attention: Mrs. Barbara B. Allbritton Mr. Robert L. Allbritton Fax: (713) 522-9623

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	Barbara B. Allbritton 2008 Marital Trust 5165 Kirby Drive, Suite 650 Houston, TX 77005 Fax: (713) 522-9623 Robert Lewis Allbritton 1996 Trust 5165 Kirby Drive, Suite 650 Houston, TX 77005 Fax: (713) 522-9623 Perpetual Corporation 1000 Wilson Blvd., Suite 2700 Arlington, VA 22209 Attention: Robert L. Allbritton Fax: (703) 647-8740 and Allholdco, Inc. 1000 Wilson Blvd., Suite 2700 Arlington, VA 22209 Attention: Robert L. Allbritton Fax: (703) 647-8740
with a copy (which shall not constitute notice) to:	Paul Hastings LLP 875 15th Street, N.W. Washington, DC 20005 Attention: Eric Dodson Greenberg Fax: (202) 551-1343
if to Buyer:	Sinclair Television Group, Inc. 10706 Beaver Dam Road Cockeysville, MD 21030 Attention: President Facsimile: (410) 568-1533
with a copy (which shall not constitute notice) to:	Sinclair Broadcast Group, Inc. 10706 Beaver Dam Road Cockeysville, MD 21030 Attention: General Counsel Facsimile: (410) 568-1537 and

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Greenberg Traurig, LLP

Terminus 200

3333 Piedmont Road NE

Suite 2500

Atlanta, GA 30305

Attention: James S. Altenbach

Facsimile: (678) 553-2212

13.5.Amendments.  No amendment or waiver of compliance with any provision hereof or consent pursuant to this Agreement shall be effective unless evidenced by an instrument in writing signed by the party against whom enforcement of such amendment, waiver, or consent is sought.

13.6.Severability.  If any Governmental Entity holds any provision in this Agreement invalid, illegal or unenforceable as applied to any party or to any circumstance under any applicable Law, such invalidity, illegality or unenforceability shall not affect any other provision or part of a provision of this Agreement, but this Agreement shall be reformed and construed as if such invalid or illegal or unenforceable provision or part of a provision had never been contained herein and such provision or part shall be reformed so that it would be valid, legal and enforceable to the maximum extent permitted by applicable Law; provided that any such reform or construction does not affect the economic or legal substance of this Agreement and the transactions contemplated hereby in a manner adverse to either party and, if any such reform or construction does affect the economic or legal substance of this Agreement and the transactions contemplated hereby in a manner adverse to either party, the parties shall negotiate in good faith a replacement provision for such invalid, illegal or unenforceable provision which shall accomplish the original intention of the parties with respect to such provision to the greatest extent practicable.

13.7.No Beneficiaries.  Nothing in this Agreement expressed or implied is intended or shall be construed to give any rights to any Person other than the parties hereto and their successors and permitted assigns.

13.8.Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

(a)This Agreement and the negotiation, execution, performance or nonperformance, interpretation, termination, construction and all matters based upon, arising out of or related to this Agreement, whether arising at law or in equity (collectively, the “Covered Matters”), and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to the Covered Matters, except for documents, agreements and instruments that specify otherwise, shall be governed by the laws of the State of Delaware without giving effect to the choice of law provisions thereof.

(b)All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the Chancery Court of the State of Delaware(or of the United States of America for the District of Delaware, to the extent the Chancery Court of the State of Delaware does not have jurisdiction over any such Action, and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of such courts (and, in the case of appeals, appropriate appellate

62

courts therefrom) in any such Action and irrevocably waive the defense of an inconvenient forum to the maintenance of any such Action.  The parties hereto agree that a final judgment in any such Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.  The consents to jurisdiction set forth in this Section 13.8 shall not constitute general consents to service of process in the State of Delaware, shall have no effect for any purpose except as provided in this Section 13.8 and shall not be deemed to confer rights on any third party.

(c)BUYER AND SELLERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BUYER OR SELLERS IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.

13.9.Neutral Construction.  The parties hereto agree that this Agreement was negotiated at arms-length and that the final terms hereof are the product of the parties’ negotiations.  This Agreement shall be deemed to have been jointly and equally drafted by all such parties, and the provisions hereof should not be construed against a party on the grounds that the party drafted or was more responsible for drafting the provision.

13.10.Cooperation.  After the Closing, each party shall cooperate with the other in the investigation, defense or prosecution of any third party Action which is pending or threatened against either party or its Affiliates with respect to the Stations, whether or not any party has notified the other of a claim for indemnity with respect to such matter.  Without limiting the generality of the foregoing, Buyer and the Acquired Companies shall make available the Station Employees to give depositions or testimony and shall furnish all documentary or other evidence that Sellers may reasonably request.  Sellers shall reimburse Buyer for all reasonable and necessary out-of-pocket third party expenses incurred in connection with the performance of Buyer’s obligations under this Section 13.10.

13.11.Non-Recourse.  No past, present or future director, officer, employee, incorporator, member, partner, equityholder, Affiliate, agent, attorney or representative of Sellers or any of its Affiliates shall have any liability for any obligations or liabilities of Sellers under this Agreement or for any claim (whether in contract or tort, at law or in equity, or based upon any theory that seeks to “pierce the corporate veil” or impose liability of an entity against its owners or Affiliates or otherwise), liability or any other obligation arising under, relating to, based on, in respect of, in connection with or by reason of, this Agreement or the transactions contemplated hereby, including its negotiation and/or execution.

13.12.Fiduciary Capacity.  The parties hereto executing this Agreement as trustees or as independent co-executors of the Trusts which own shares of Perpetual Corp. are executing this Agreement solely in their respective capacities as trustees or as independent co-executors of such Trusts, and in no other capacity whatsoever and they shall have no individual or personal liability under this Agreement, and all liabilities while acting in a fiduciary capacity of any Trust hereunder and thereunder shall be limited to the assets of such Trust at the time such liability may be established.

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13.13.Counterparts; Delivery by Facsimile/Email.  This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which together will constitute one and the same agreement.  This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by facsimile transmission or electronic mail in pdf form, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any party hereto or any party to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties.  No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract, and each such party forever waives any such defense.

13.14.Entire Agreement.  The Schedules and Exhibits hereto are hereby incorporated into this Agreement.  This Agreement, together with any other agreement executed on the date hereof in connection herewith, constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings with respect to the subject matter hereof, except the NDA, which shall remain in full force and effect.  No party makes any representation or warranty with respect to the transactions contemplated by this Agreement except as expressly set forth in this Agreement (or in any of the Buyer Ancillary Agreements or Seller Ancillary Agreements, or any other agreement executed on the date hereof or thereof in connection herewith or therewith).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as of the date set forth above.

/s/ Barbara B. Allbritton

BARBARA B. ALLBRITTON, individually

/s/ Robert Allbritton

ROBERT L. ALLBRITTON, individually

THE ESTATE OF JOE L. ALLBRITTON

/s/ Barbara B. Allbritton

Barbara B. Allbritton, as independent co-executor of

The Estate of Joe L. Allbritton

/s/ Robert Allbritton

Robert L. Allbritton, as independent co-executor of

The Estate of Joe L. Allbritton

BARBARA B. ALLBRITTON 2008 MARITAL TRUST

/s/ Barbara B. Allbritton

Barbara B. Allbritton, as trustee of the

Barbara B. Allbritton 2008 Marital Trust

/s/ Robert Allbritton

Robert L. Allbritton, as trustee of the

Barbara B. Allbritton 2008 Marital Trust

ROBERT LEWIS ALLBRITTON 1996 TRUST

/s/ Robert Allbritton

Robert L. Allbritton, as trustee of the

Robert Lewis Allbritton 1996 Trust

/s/ Paul B. Bonner

Paul Bonner, as trustee of the

Robert Lewis Allbritton 1996 Trust

/s/ John R. Allender

John R. Allender, as trustee of the

Robert Lewis Allbritton 1996 Trust

ALLHOLDCO, INC.

/s/ Robert Allbritton

Name:  Robert Allbritton

Title:  President

SINCLAIR TELEVISION GROUP, INC.

/s/ David Smith

Name:  David D. Smith

Title:  President

In accordance with Item 601(b)(2) of Regulation S-K, the Company has omitted the exhibits and schedules hereto:

Exhibit B – FIRPTA Certificate

Disclosure Schedules

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, David D. Smith, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

A)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

A)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 12, 2013
			/s/ David D. Smith
		Signature:	David D. Smith
			Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, David B. Amy, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

A)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

B)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

C)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

D)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

A)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

B)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 12, 2013
			/s/ David B. Amy
		Signature:	David B. Amy
			Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc. (the “Company”) for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David D. Smith, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David D. Smith

David D. Smith

Chief Executive Officer

November 12, 2013

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Sinclair Broadcast Group, Inc. (the “Company”) for the period ending September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David B. Amy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David B. Amy

David B. Amy

Chief Financial Officer

November 12, 2013

XML

SEGMENT DATA

9 Months Ended

Sep. 30, 2013

SEGMENT DATA

SEGMENT DATA

7. SEGMENT DATA

We measure segment performance based on operating income (loss).  Excluding discontinued operations, our broadcast segment includes stations in 58 markets located throughout the continental United States. The operating results of WLAJ-TV and WLWC-TV, which were sold effective March 1, 2013 and April 1, 2013, respectively, are classified as discontinued operations and are not included in our consolidated results of continuing operations for the nine months ended September 30, 2013 and 2012. Our other operating divisions primarily consist of sign design and fabrication; regional security alarm operating and bulk acquisitions and real estate ventures. All of our other operating divisions are located within the United States.  Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location.  Our Other Operating Divisions and Corporate are not reportable segments but are included for reconciliation purposes.  We had approximately $171.7 million and $171.2 million of intercompany loans between the broadcast segment, operating divisions and corporate as of September 30, 2013 and 2012, respectively.  We had $5.0 million in intercompany interest expense related to intercompany loans between the broadcast segment, other operating divisions and corporate for the both three months ended September 30, 2013, and 2012, respectively.   For the nine months ended September 30, 2013 and 2012, we had $15.0 million and $14.9 million, respectively, in intercompany interest expense.  Intercompany loans and interest expense are excluded from the tables below.  All other intercompany transactions are immaterial.

Financial information for our operating segments are included in the following tables for the periods presented (in thousands):

For the three months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	323,681	$	14,963		$	—		$	338,644
Depreciation of property and equipment	16,579		481			348			17,408
Amortization of definite-lived intangible assets and other assets	15,851		1,317			—			17,168
Amortization of program contract costs and net realizable value adjustments	19,229		—			—			19,229
General and administrative overhead expenses	14,633		576			900			16,109
Operating income (loss)	74,210		(113		)	(1,249		)	72,848
Interest expense	—		846			39,021			39,867
Income from equity and cost method investments	—		1,571			—			1,571
Assets	3,303,838		306,204			7,631			3,617,673

For the three months ended September 30, 2012	Broadcast		Other Operating Divisions		Corporate			Consolidated
Revenue	$	246,202	$	12,512	$	—		$	258,714
Depreciation of property and equipment	11,864		380		382			12,626
Amortization of definite-lived intangible assets and other assets	9,556		1,006		—			10,562
Amortization of program contract costs and net realizable value adjustments	14,296		—		—			14,296
General and administrative overhead expenses	7,325		215		746			8,286
Operating income (loss)	78,988		538		(1,128		)	78,398
Interest expense	—		962		34,332			35,294
Income from equity and cost method investments	—		1,919		—			1,919

For the nine months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	896,153	$	39,263		$	—		$	935,416
Depreciation of property and equipment	44,739		1,330			1,039			47,108
Amortization of definite-lived intangible assets and other assets	45,089		3,638			—			48,727
Amortization of program contract costs and net realizable value adjustments	56,746		—			—			56,746
General and administrative overhead expenses	34,991		1,136			2,679			38,806
Operating income (loss)	224,652		(150		)	(3,718		)	220,784
Interest expense	—		2,385			120,644			123,029
Income from equity and cost method investments	—		115			—			115

For the nine months ended September 30, 2012	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	693,553	$	38,609		$	—		$	732,162
Depreciation of property and equipment	31,768		1,115			1,148			34,031
Amortization of definite-lived intangible assets and other assets	23,021		3,354			—			26,375
Amortization of program contract costs and net realizable value adjustments	43,565		—			—			43,565
General and administrative overhead expenses	21,932		1,130			2,104			25,166
Operating income (loss)	213,618		(172		)	(3,265		)	210,181
Interest expense	—		2,517			89,484			92,001
Income from equity and cost method investments	—		8,343			—			8,343

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
REVENUES:
Station broadcast revenues, net of agency commissions	$ 303,028	$ 225,023	$ 835,223	$ 633,493
Revenues realized from station barter arrangements	20,653	21,179	60,930	60,060
Other operating divisions revenues	14,963	12,512	39,263	38,609
Total revenues	338,644	258,714	935,416	732,162
OPERATING EXPENSES:
Station production expenses	98,939	61,705	265,066	184,098
Station selling, general and administrative expenses	66,115	43,169	171,350	120,462
Expenses recognized from station barter arrangements	18,082	19,300	53,478	55,119
Amortization of program contract costs and net realizable value adjustments	19,229	14,296	56,746	43,565
Other operating divisions expenses	12,746	10,372	33,351	33,165
Depreciation of property and equipment	17,408	12,626	47,108	34,031
Corporate general and administrative expenses	16,109	8,286	38,806	25,166
Amortization of definite-lived intangible and other assets	17,168	10,562	48,727	26,375
Total operating expenses	265,796	180,316	714,632	521,981
Operating income	72,848	78,398	220,784	210,181
OTHER INCOME (EXPENSE):
Interest expense and amortization of debt discount and deferred financing costs	(39,867)	(35,294)	(123,029)	(92,001)
Loss from extinguishment of debt			(16,283)	(335)
Income from equity and cost method investments	1,571	1,919	115	8,343
Other income, net	488	547	1,427	1,733
Total other expense	(37,808)	(32,828)	(137,770)	(82,260)
Income from continuing operations before income taxes	35,040	45,570	83,014	127,921
INCOME TAX PROVISION	(4,489)	(19,093)	(22,992)	(42,185)
Income from continuing operations	30,551	26,477	60,022	85,736
DISCONTINUED OPERATIONS:
Income (loss) from discontinued operations, includes income tax benefit (provision) of $6,107, $(36), $10,806 and $(220), respectively	6,100	(125)	11,558	(178)
NET INCOME	36,651	26,352	71,580	85,558
Net (income) loss attributable to the noncontrolling interests	(309)	(107)	(415)	106
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	36,342	26,245	71,165	85,664
Dividends declared per share (in dollars per share)	$ 0.15	$ 0.15	$ 0.45	$ 0.39
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
Basic earnings per share from continuing operations (in dollars per share)	$ 0.30	$ 0.33	$ 0.66	$ 1.06
Basic earnings per share from discontinued operations (in dollars per share)	$ 0.06	$ 0.00	$ 0.13	$ 0.00
Basic earnings per share (in dollars per share)	$ 0.37	$ 0.33	$ 0.78	$ 1.06
Diluted earnings per share from continuing operations (in dollars per share)	$ 0.30	$ 0.33	$ 0.65	$ 1.06
Diluted earnings per share from discontinued operations (in dollars per share)	$ 0.06	$ 0.00	$ 0.13	$ 0.00
Diluted earnings per share (in dollars per share)	$ 0.36	$ 0.32	$ 0.78	$ 1.05
Weighted average common shares outstanding (in shares)	99,473	81,081	90,982	80,990
Weighted average common and common equivalent shares outstanding (in shares)	100,239	81,379	91,549	81,267
AMOUNTS ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP COMMON SHAREHOLDERS:
Income from continuing operations, net of tax	30,242	26,370	59,607	85,842
Income (loss) from discontinued operations, net of tax	6,100	(125)	11,558	(178)
Net income	$ 36,342	$ 26,245	$ 71,165	$ 85,664

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF CASH FLOWS
Proceeds from exercise of stock options, excess tax benefits of share based payments	$ 0.5	$ 0.2

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SEGMENT DATA (Tables)

9 Months Ended

Sep. 30, 2013

SEGMENT DATA

Schedule of financial information for operating segments

Financial information for our operating segments are included in the following tables for the periods presented (in thousands):

For the three months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	323,681	$	14,963		$	—		$	338,644
Depreciation of property and equipment	16,579		481			348			17,408
Amortization of definite-lived intangible assets and other assets	15,851		1,317			—			17,168
Amortization of program contract costs and net realizable value adjustments	19,229		—			—			19,229
General and administrative overhead expenses	14,633		576			900			16,109
Operating income (loss)	74,210		(113		)	(1,249		)	72,848
Interest expense	—		846			39,021			39,867
Income from equity and cost method investments	—		1,571			—			1,571
Assets	3,303,838		306,204			7,631			3,617,673

For the three months ended September 30, 2012	Broadcast		Other Operating Divisions		Corporate			Consolidated
Revenue	$	246,202	$	12,512	$	—		$	258,714
Depreciation of property and equipment	11,864		380		382			12,626
Amortization of definite-lived intangible assets and other assets	9,556		1,006		—			10,562
Amortization of program contract costs and net realizable value adjustments	14,296		—		—			14,296
General and administrative overhead expenses	7,325		215		746			8,286
Operating income (loss)	78,988		538		(1,128		)	78,398
Interest expense	—		962		34,332			35,294
Income from equity and cost method investments	—		1,919		—			1,919

For the nine months ended September 30, 2013	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	896,153	$	39,263		$	—		$	935,416
Depreciation of property and equipment	44,739		1,330			1,039			47,108
Amortization of definite-lived intangible assets and other assets	45,089		3,638			—			48,727
Amortization of program contract costs and net realizable value adjustments	56,746		—			—			56,746
General and administrative overhead expenses	34,991		1,136			2,679			38,806
Operating income (loss)	224,652		(150		)	(3,718		)	220,784
Interest expense	—		2,385			120,644			123,029
Income from equity and cost method investments	—		115			—			115

For the nine months ended September 30, 2012	Broadcast		Other Operating Divisions			Corporate			Consolidated
Revenue	$	693,553	$	38,609		$	—		$	732,162
Depreciation of property and equipment	31,768		1,115			1,148			34,031
Amortization of definite-lived intangible assets and other assets	23,021		3,354			—			26,375
Amortization of program contract costs and net realizable value adjustments	43,565		—			—			43,565
General and administrative overhead expenses	21,932		1,130			2,104			25,166
Operating income (loss)	213,618		(172		)	(3,265		)	210,181
Interest expense	—		2,517			89,484			92,001
Income from equity and cost method investments	—		8,343			—			8,343

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FAIR VALUE MEASUREMENTS:

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS:

FAIR VALUE MEASUREMENTS:

8. FAIR VALUE MEASUREMENTS:

Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).  A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value.  The following is a brief description of those three levels:

· Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

· Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.  These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

· Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The carrying value and fair value of our notes and debentures for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 2:
9.25% Senior Second Lien Notes due 2017	$	491,709	$	531,875	$	490,517	$	552,500
8.375% Senior Notes due 2018	235,129		237,506		234,853		265,886
6.125% Senior Unsecured Notes due 2022	500,000		503,125		500,000		533,125
5.375% Senior Unsecured Notes due 2021	600,000		574,500		—		—
Term Loan A	55,000		54,753		263,875		262,556
Term Loan B	398,000		394,178		580,850		589,125
Deerfield Bank Credit Facility	24,694		24,898		19,950		19,950

Not included in the table above are the fair values and carrying values for our 3.0% Notes, which as discussed further in Note 4.  Notes Payable and Commercial Bank Financing, were converted and settled in cash in October 2013 for $10.5 million. We believe the fair value of 3.0% Notes approximates the carrying value based on discounted cash flows using Level 3 inputs described above, as of December 31, 2012.  The fair values and carrying values of the outstanding amounts under the Cunningham Bank Credit Facility totaling $21.5 million, are also not include in the table above.  The outstanding balance was repaid in full on October 1, 2013.  We believe the fair value approximates the carrying value based on discounted cash flows using Level 2 inputs.

Additionally, Cunningham, one of our consolidated VIEs has investments in marketable securities which are recorded at fair value using Level 1 inputs described above. As of September 30, 2013 and December 31, 2012, $9.0 million and $6.4 million, respectively, were included in other assets in our consolidated balance sheets.

The carrying amounts of working capital items such as, cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to their short-term nature.

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FAIR VALUE MEASUREMENTS: (Details) (USD $)										1 Months Ended		9 Months Ended
	Oct. 12, 2013 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 8.375% Senior Notes due 2018	Sep. 30, 2013 6.125% Senior Unsecured Notes due 2022	Jun. 28, 2013 6.125% Senior Unsecured Notes due 2022	Oct. 31, 2012 6.125% Senior Unsecured Notes due 2022	Sep. 30, 2013 5.375% Senior Unsecured Notes due 2021	Jun. 28, 2013 5.375% Senior Unsecured Notes due 2021	Apr. 02, 2013 5.375% Senior Unsecured Notes due 2021	Oct. 31, 2013 3.0% Convertible Senior Notes, due 2027	Sep. 30, 2013 3.0% Convertible Senior Notes, due 2027	Sep. 30, 2013 Level 1 Fair Value Cunningham item	Dec. 31, 2012 Level 1 Fair Value Cunningham	Sep. 30, 2013 Level 2 Carrying Value 9.25% Senior Secured Second Lien Notes due 2017	Dec. 31, 2012 Level 2 Carrying Value 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 Level 2 Carrying Value 8.375% Senior Notes due 2018	Dec. 31, 2012 Level 2 Carrying Value 8.375% Senior Notes due 2018	Sep. 30, 2013 Level 2 Carrying Value 6.125% Senior Unsecured Notes due 2022	Dec. 31, 2012 Level 2 Carrying Value 6.125% Senior Unsecured Notes due 2022	Sep. 30, 2013 Level 2 Carrying Value 5.375% Senior Unsecured Notes due 2021	Sep. 30, 2013 Level 2 Carrying Value Term Loan A	Dec. 31, 2012 Level 2 Carrying Value Term Loan A	Sep. 30, 2013 Level 2 Carrying Value Term Loan B	Dec. 31, 2012 Level 2 Carrying Value Term Loan B	Sep. 30, 2013 Level 2 Carrying Value Deerfield Bank Credit Facility	Dec. 31, 2012 Level 2 Carrying Value Deerfield Bank Credit Facility	Sep. 30, 2013 Level 2 Carrying Value Cunningham Bank Credit Facility	Sep. 30, 2013 Level 2 Fair Value 9.25% Senior Secured Second Lien Notes due 2017	Dec. 31, 2012 Level 2 Fair Value 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 Level 2 Fair Value 8.375% Senior Notes due 2018	Dec. 31, 2012 Level 2 Fair Value 8.375% Senior Notes due 2018	Sep. 30, 2013 Level 2 Fair Value 6.125% Senior Unsecured Notes due 2022	Dec. 31, 2012 Level 2 Fair Value 6.125% Senior Unsecured Notes due 2022	Sep. 30, 2013 Level 2 Fair Value 5.375% Senior Unsecured Notes due 2021	Sep. 30, 2013 Level 2 Fair Value Term Loan A	Dec. 31, 2012 Level 2 Fair Value Term Loan A	Sep. 30, 2013 Level 2 Fair Value Term Loan B	Dec. 31, 2012 Level 2 Fair Value Term Loan B	Sep. 30, 2013 Level 2 Fair Value Deerfield Bank Credit Facility	Dec. 31, 2012 Level 2 Fair Value Deerfield Bank Credit Facility	Sep. 30, 2013 Level 2 Fair Value Cunningham Bank Credit Facility
FAIR VALUE MEASUREMENTS:
Interest rate (as a percent)	9.25%	9.25%	8.375%	6.125%	6.125%	6.125%	5.375%	5.375%	5.375%		3.00%
Fair Value														$ 491,709,000	$ 490,517,000	$ 235,129,000	$ 234,853,000	$ 500,000,000	$ 500,000,000	$ 600,000,000	$ 55,000,000	$ 263,875,000	$ 398,000,000	$ 580,850,000	$ 24,694,000	$ 19,950,000	$ 21,500,000	$ 531,875,000	$ 552,500,000	$ 237,506,000	$ 265,886,000	$ 503,125,000	$ 533,125,000	$ 574,500,000	$ 54,753,000	$ 262,556,000	$ 394,178,000	$ 589,125,000	$ 24,898,000	$ 19,950,000	$ 21,500,000
Number of VIEs who classify investments as trading securities												1
Notes converted and settled in cash										10,500,000
Fair value of trading securities												$ 9,000,000	$ 6,400,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended			9 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2012 WLAJ-TV	Sep. 30, 2013 WLAJ-TV	Sep. 30, 2012 WLAJ-TV	Oct. 31, 2012 WLAJ-TV	Sep. 30, 2012 WLAJ-TV Maximum	Sep. 30, 2012 WLWC-TV	Sep. 30, 2013 WLWC-TV	Sep. 30, 2012 WLWC-TV	Jan. 31, 2013 WLWC-TV
Discontinued Operations
Proceeds from assets sold to an unrelated third party								$ 14,400,000					$ 13,800,000
Total revenues, net	338,644,000	258,714,000	935,416,000	732,162,000	1,100,000	600,000	2,200,000			1,800,000	1,600,000	4,700,000
Total income (loss) before taxes						$ 200,000			$ (100,000)		$ 400,000	$ 100,000

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS: (Tables)

9 Months Ended

Sep. 30, 2013

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

Schedule of condensed consolidating balance sheet

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—	$	194,539	$	16,911	$	17,544		$	—		$	228,994
Accounts and other receivables	86		1,733		239,971		9,620			(1,356		)	250,054
Other current assets	2,487		8,538		81,134		12,446			(1,971		)	102,634
Assets held for sale	—		—		5,900		—			—			5,900
Total current assets	2,573		204,810		343,916		39,610			(3,327		)	587,582
Property and equipment, net	5,284		11,008		380,973		123,359			(7,242		)	513,382
Investment in consolidated subsidiaries	378,899		2,098,135		2,783		—			(2,479,817		)	—
Restricted cash — long-term	—		38,933		222		2,102			—			41,257
Other long-term assets	80,396		474,993		78,519		118,092			(492,074		)	259,926
Total other long-term assets	459,295		2,612,061		81,524		120,194			(2,971,891		)	301,183
Goodwill and other intangible assets	—		—		2,113,626		176,899			(74,999		)	2,215,526
Total assets	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	(3,057,459	)	$	3,617,673
Accounts payable and accrued liabilities	$	200	$	89,341	$	111,616	$	14,354		$	(320	)	$	215,191
Current portion of long-term debt	536		4,665		967		10,454			—			16,622
Current portion of affiliate long-term debt	1,254		—		1,017		720			(720		)	2,271
Other current liabilities	938		—		95,595		10,070			24			106,627
Total current liabilities	2,928		94,006		209,195		35,598			(1,016		)	340,711
Long-term debt	6,076		2,275,837		35,965		118,508			—			2,436,386
Affiliate long-term debt	5,306		—		14,314		283,097			(283,098		)	19,619
Other liabilities	44,321		28,381		563,579		110,021			(341,583		)	404,719
Total liabilities	58,631		2,398,224		823,053		547,224			(625,697		)	3,201,435
Total Sinclair Broadcast Group equity (deficit)	408,521		429,655		2,096,986		(94,879		)	(2,431,762		)	408,521
Noncontrolling interests in consolidated subsidiaries	—		—		—		7,717			—			7,717
Total liabilities and equity (deficit)	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	3,057,459		$	3,617,673

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(in thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	7,230		$	199	$	15,436		$	—		$	22,865
Accounts and other receivables	152			907			175,837		7,622			(622		)	183,896
Other current assets	2,821			2,342			56,522		9,028			(3,383		)	67,330
Assets held for sale	—			—			30,357		—			—			30,357
Total current assets	2,973			10,479			262,915		32,086			(4,005		)	304,448
Property and equipment, net	6,315			8,938			321,873		113,454			(10,867		)	439,713
Investment in consolidated subsidiaries	—			1,636,504			1,956		—			(1,638,460		)	—
Restricted cash — long term	—			2			223		—			—			225
Other long-term assets	84,055			375,687			60,114		112,757			(429,862		)	202,751
Total other long-term assets	84,055			2,012,193			62,293		112,757			(2,068,322		)	202,976
Goodwill and other intangible assets	—			—			1,706,646		153,961			(78,047		)	1,782,560
Total assets	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697
Accounts payable and accrued liabilities	$	326		$	61,165		$	83,049	$	9,379		$	(102	)	$	153,817
Current portion of long-term debt	483			31,113			800		15,226			—			47,622
Current portion of affiliate long-term debt	1,102			—			602		433			(433		)	1,704
Other current liabilities	—			—			96,288		8,871			(3,099		)	102,060
Liabilities held for sale	—			—			2,397		—			—			2,397
Total current liabilities	1,911			92,278			183,136		33,909			(3,634		)	307,600
Long-term debt	12,502			2,088,586			36,705		73,073			—			2,210,866
Affiliate long-term debt	6,303			—			6,884		267,521			(267,521		)	13,187
Dividends in excess of investment in consolidated subsidiaries	178,869			—			—		—			(178,869		)	—
Other liabilities	10,708			2,509			491,845		103,007			(309,972		)	298,097
Total liabilities	210,293			2,183,373			718,570		477,510			(759,996		)	2,829,750
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(116,950		)	(151,763		)	1,635,157		(82,149		)	(1,401,245		)	(116,950		)
Noncontrolling interests in consolidated subsidiaries	—			—			—		16,897			—			16,897
Total liabilities and equity (deficit)	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697

Schedule of condensed consolidating statement of operations and comprehensive income

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	319,767		$	32,970		$	(14,093	)	$	338,644
Program and production	—			112			99,186			13,870			(14,229		)	98,939
Selling, general and administrative	901			14,712			64,300			2,386			(75		)	82,224
Depreciation, amortization and other operating expenses	348			629			68,820			19,143			(4,307		)	84,633
Total operating expenses	1,249			15,453			232,306			35,399			(18,611		)	265,796
Operating (loss) income	(1,249		)	(15,453		)	87,461			(2,429)			4,518			72,848
Equity in earnings of consolidated subsidiaries	40,547			55,128			60			—			(95,735		)	—
Interest expense	(203		)	(37,123		)	(1,269		)	(6,538		)	5,266			(39,867		)
Other income (expense)	996			6,772			(6,710		)	1,085			(84		)	2,059
Total other income (expense)	41,340			24,777			(7,919		)	(5,453		)	(90,553		)	(37,808		)
Income tax benefit (provision)	(3,749		)	16,667			(22,236		)	929			3,900			(4,489		)
Income from discontinued operations	—			6,108			(8		)	—			—			6,100
Net income (loss)	36,342			32,099			57,298			(6,953		)	(82,135		)	36,651
Net income attributable to the noncontrolling interests	—			—			—			(309		)	—			(309		)
Net income (loss) attributable to Sinclair Broadcast Group	$	36,342		$	32,099		$	57,298		$	(7,262	)	$	(82,135	)	$	36,342
Comprehensive income (loss)	$	36,613		$	32,061		$	57,298		$	(7,262	)	$	(82,097	)	$	36,613

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	246,531		$	14,364		$	(2,181	)	$	258,714
Program and production	—			278			63,777			(1		)	(2,349		)	61,705
Selling, general and administrative	746			13,157			36,720			908			(76		)	51,455
Depreciation, amortization and other operating expenses	382			618			53,819			12,508			(171		)	67,156
Total operating expenses	1,128			14,053			154,316			13,415			(2,596		)	180,316
Operating (loss) income	(1,128		)	(14,053		)	92,215			949			415			78,398
Equity in earnings of consolidated subsidiaries	26,435			50,171			—			—			(76,606		)	—
Interest expense	(341		)	(32,560		)	(1,291		)	(6,352		)	5,250			(35,294		)
Other income (expense)	869			43			40			1,597			(83		)	2,466
Total other income (expense)	26,963			17,654			(1,251		)	(4,755		)	(71,439		)	(32,828		)
Income tax benefit (provision)	326			19,872			(39,396		)	105			—			(19,093		)
(Loss) income from discontinued operations	84			(68		)	(141		)	—			—			(125		)
Net income (loss)	26,245			23,405			51,427			(3,701		)	(71,024		)	26,352
Net income attributable to the noncontrolling interests	—			—			—			(107		)	—			(107		)
Net income (loss) attributable to Sinclair Broadcast Group	$	26,245		$	23,405		$	51,427		$	(3,808	)	$	(71,024	)	$	26,245
Comprehensive income (loss)	$	26,409		$	23,462		$	51,427		$	(3,808	)	$	(71,081	)	$	26,409

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	887,489		$	90,402		$	(42,475	)	$	935,416
Program and production	—			207			269,360			28,489			(32,990		)	265,066
Selling, general and administrative	2,679			34,840			167,654			14,627			(9,644		)	210,156
Depreciation, amortization and other operating expenses	1,038			1,558			186,926			50,691			(803		)	239,410
Total operating expenses	3,717			36,605			623,940			93,807			(43,437		)	714,632
Operating (loss) income	(3,717		)	(36,605		)	263,549			(3,405		)	962			220,784
Equity in earnings of consolidated subsidiaries	76,623			164,370			—			—			(240,993		)	—
Interest expense	(903		)	(115,115		)	(3,607		)	(19,027		)	15,623			(123,029		)
Other income (expense)	3,029			3,141			(19,433		)	4,990			(6,468		)	(14,741		)
Total other income (expense)	78,749			52,396			(23,040		)	(14,037		)	(231,838		)	(137,770		)
Income tax (provision) benefit	(3,867		)	47,645			(73,267		)	2,597			3,900			(22,992		)
Income from discontinued operations	—			11,063			495			—			—			11,558
Net income (loss)	71,165			74,499			167,737			(14,845		)	(226,976		)	71,580
Net income attributable to the noncontrolling interests	—			—			—			(415		)	—			(415		)
Net income (loss) attributable to Sinclair Broadcast Group	$	71,165		$	74,499		$	167,737		$	(15,260	)	$	(226,976	)	$	71,165
Comprehensive income (loss)	$	71,464		$	74,383		$	167,737		$	(15,260	)	$	(226,860	)	$	71,464

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	694,520		$	44,179		$	(6,537	)	$	732,162
Program and production	—			291			190,169			158			(6,520		)	184,098
Selling, general and administrative	2,117			38,720			102,075			2,999			(283		)	145,628
Depreciation, amortization and other operating expenses	1,148			1,282			150,636			39,636			(447		)	192,255
Total operating expenses	3,265			40,293			442,880			42,793			(7,250		)	521,981
Operating (loss) income	(3,265		)	(40,293		)	251,640			1,386			713			210,181
Equity in earnings of consolidated subsidiaries	86,991			156,249			—			—			(243,240		)	—
Interest expense	(999		)	(84,277		)	(3,695		)	(18,651		)	15,621			(92,001		)
Other income (expense)	2,192			53			85			7,751			(340		)	9,741
Total other income (expense)	88,184			72,025			(3,610		)	(10,900		)	(227,959		)	(82,260		)
Income tax benefit (provision)	745			38,414			(88,485		)	7,141			—			(42,185		)
(Loss) income from discontinued operations	—			(202		)	24			—			—			(178		)
Net income (loss)	85,664			69,944			159,569			(2,373		)	(227,246		)	85,558
Net loss attributable to the noncontrolling interests	—			—			—			106			—			106
Net income (loss) attributable to Sinclair Broadcast Group	$	85,664		$	69,944		$	159,569		$	(2,267	)	$	(227,246	)	$	85,664
Comprehensive income	$	85,804		$	70,190		$	159,569		$	(2,267	)	$	(227,492	)	$	85,804

Schedule of condensed consolidating statement of cash flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(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	$	(3,042	)	$	(66,985	)	$	208,126		$	(816	)	$	13,356		$	150,639
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,253		)	(21,109		)	(5,414		)	—			(28,776		)
Payments for acquisitions of television stations	—			—			(495,440		)	—			—			(495,440		)
Payments for acquisitions in other operating divisions	—			—			—			(4,650		)	—			(4,650		)
Purchase of alarm monitoring contracts	—			—			1,114			(13,042		)	—			(11,928		)
Proceeds from sale of broadcast assets	—			—			27,992			—			—			27,992
Decrease in restricted cash	—			(38,930		)	—			(2,102		)	—			(41,032		)
Other, net	1,648			—			4,454			1,898			(10,908		)	(2,908		)
Net cash flows (used in) from investing activities	1,648			(41,183		)	(482,989		)	(23,310		)	(10,908		)	(556,742		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			1,146,789			—			52,026			—			1,198,815
Repayments of notes payable, commercial bank financing and capital leases	(234		)	(985,755		)	(802		)	(11,294		)	—			(998,085		)
Proceeds from the sale of common stock	472,400			—			—			—			—			472,400
Dividends paid on Class A and Class B Common Stock	(41,938		)	—			235			—			(235		)	(41,938		)
Increase (decrease) in intercompany payables	(429,664		)	154,648			292,696			(4,549		)	(13,131		)	—
Other, net	830			(20,205		)	(554		)	(9,949		)	10,918			(18,960		)
Net cash flows (used in) from financing activities	1,394			295,477			291,575			26,234			(2,448		)	612,232
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			187,309			16,712			2,108			—			206,129
CASH AND CASH EQUIVALENTS, beginning of period	—			7,230			199			15,436			—			22,865
CASH AND CASH EQUIVALENTS, end of period	$	—		$	194,539		$	16,911		$	17,544		$	—		$	228,994

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(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	$	(460	)	$	(75,408	)	$	228,829		$	9,428		$	915		$	163,304
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,458		)	(25,624		)	(2,075		)	—			(30,157		)
Payments for acquisitions of television stations	—			—			(590,917		)	—			—			(590,917		)
Purchase of alarm monitoring contracts	—			—			—			(7,343		)	—			(7,343		)
Decrease in restricted cash	—			15,849			—			—			—			15,849
Other, net	740			—			63			2,502			—			3,305
Net cash flows (used in) from investing activities	740			13,391			(616,478		)	(6,916		)	—			(609,263		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			596,275			—			19.432			—			615,707
Repayments of notes payable, commercial bank financing and capital leases	(308		)	(79,077		)	(458		)	(16,002		)	—			(95,845		)
Dividends paid on Class A and Class B Common Stock	(31,646		)	—			—			—			401			(31,245		)
Increase (decrease) in intercompany payables	32,087			(435,595		)	389,771			15,053			(1,316		)	—
Other, net	(413		)	(8,364		)	(1,489		)	(734		)	—			(11,000		)
Net cash flows (used in) from financing activities	(280		)	73,239			387,824			17,749			(915		)	477,617
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			11,222			175			20,261			—			31,658
CASH AND CASH EQUIVALENTS, beginning of period	—			188			313			12,466			—			12,967
CASH AND CASH EQUIVALENTS, end of period	$	—		$	11,410		$	488		$	32,727		$	—		$	44,625

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NOTES PAYABLE AND COMMERCIAL BANK FINANCING (Details) (USD $)	9 Months Ended		0 Months Ended			1 Months Ended	0 Months Ended		3 Months Ended	9 Months Ended	0 Months Ended			0 Months Ended						0 Months Ended					1 Months Ended		1 Months Ended			3 Months Ended	0 Months Ended			1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Oct. 23, 2013 Subsequent Event Bank Credit Agreement	Apr. 09, 2013 Term Loan A Bank Credit Agreement	Oct. 23, 2013 Term Loan A Subsequent Event Bank Credit Agreement	Oct. 31, 2013 Term Loan A Subsequent Event Bank Credit Agreement	Oct. 23, 2013 Term Loan A Subsequent Event Bank Credit Agreement LIBOR	Apr. 09, 2013 Term Loan B Bank Credit Agreement	Sep. 30, 2013 Term Loan B Bank Credit Agreement	Sep. 30, 2013 Term Loan B Bank Credit Agreement	Oct. 23, 2013 Term Loan B Subsequent Event Bank Credit Agreement	Oct. 23, 2013 Term Loan B Subsequent Event Bank Credit Agreement LIBOR	Sep. 30, 2013 6.375% Senior Notes, due 2021	Oct. 11, 2013 6.375% Senior Notes, due 2021 Subsequent Event	Oct. 11, 2013 6.375% Senior Notes, due 2021 Subsequent Event Period beginning on November 1, 2016	Oct. 11, 2013 6.375% Senior Notes, due 2021 Subsequent Event Period on or prior to November 1, 2016	Jun. 28, 2013 5.375% Senior Unsecured Notes, due 2021	Apr. 02, 2013 5.375% Senior Unsecured Notes, due 2021	Sep. 30, 2013 5.375% Senior Unsecured Notes, due 2021	Apr. 02, 2013 5.375% Senior Unsecured Notes, due 2021 Period prior to April 1, 2016	Apr. 02, 2013 5.375% Senior Unsecured Notes, due 2021 Period on or prior to April 1, 2016	Jun. 28, 2013 6.125% Senior Unsecured Notes, due 2022	Sep. 30, 2013 6.125% Senior Unsecured Notes, due 2022	Oct. 31, 2012 6.125% Senior Unsecured Notes, due 2022	Sep. 30, 2013 4.875% Notes	Sep. 30, 2013 3.0% Notes	Oct. 31, 2013 3.0% Notes Subsequent Event	Oct. 12, 2013 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 9.25% Senior Secured Second Lien Notes due 2017	Dec. 31, 2013 9.25% Senior Secured Second Lien Notes due 2017 Forecast	Oct. 12, 2013 9.25% Senior Secured Second Lien Notes due 2017 Subsequent Event	Apr. 09, 2013 Revolving line of credit Bank Credit Agreement	Oct. 23, 2013 Revolving line of credit Subsequent Event Bank Credit Agreement	Oct. 31, 2013 Revolving line of credit Subsequent Event Bank Credit Agreement
Notes Payable And Commercial Bank Financing
Amount of debt issued			$ 450,000,000		$ 200,000,000	$ 445,000,000					$ 250,000,000			$ 350,000,000				$ 600,000,000
Variable rate basis				LIBOR			LIBOR	LIBOR				LIBOR																				LIBOR
Interest rate margin (as a percent)				2.25%			2.25%	2.25%				2.25%																				2.25%
LIBOR floor (as a percent)								0.75%				0.75%
Borrowing capacity				500,000,000	700,000,000			400,000,000			650,000,000														5,700,000		5,400,000					100,000,000
Gain (loss) on extinguishment of debt	16,283,000	335,000						16,300,000																			(900,000)			43,100,000
Deferred financing costs related to amendment			10,600,000					7,300,000	9,700,000	9,700,000
Interest expense									(2,400,000)	2,400,000
Increase in borrowing capacity																																	57,500,000	50,000,000
Debt instrument, stated interest rate payable (as a percent)													6.375%	6.375%			5.375%	5.375%	5.375%			6.125%	6.125%	6.125%	4.875%	3.00%	3.00%	9.25%	9.25%		9.25%
Percent of outstanding debt converted														1.00				1.00							1.00		1.00
Redemption price of the debt instrument (as a percent)															100.00%					100.00%
Maximum percentage of the principal amount of the debt instrument which the entity may redeem with the proceeds from certain equity offerings																35.00%					35.00%
Purchase price in tender offers commenced as a percentage of face value																	100.00%					100.00%
Face amount of outstanding notes																	600,000,000					500,000,000
Class A Common Stock issued upon conversion (in shares)																									338,632
Face amount of debt redeemed																															500,000,000
Redemption price	998,085,000	95,845,000																													546,100,000
Conversion price	7,313,000																										10,500,000
Accrued and unpaid interest and make-whole premium																															25,400,000
Increase in additional paid-in capital																									$ 7,300,000

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS: (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Net revenue	$ 338,644	$ 258,714	$ 935,416	$ 732,162
Program and production	98,939	61,705	265,066	184,098
Selling, general and administrative	82,224	51,455	210,156	145,628
Depreciation, amortization and other operating expenses	84,633	67,156	239,410	192,255
Total operating expenses	265,796	180,316	714,632	521,981
Operating income	72,848	78,398	220,784	210,181
Interest expense	(39,867)	(35,294)	(123,029)	(92,001)
Other income (expense)	2,059	2,466	(14,741)	9,741
Total other expense	(37,808)	(32,828)	(137,770)	(82,260)
Income tax (provision) benefit	(4,489)	(19,093)	(22,992)	(42,185)
Income (loss) from discontinued operations	6,100	(125)	11,558	(178)
NET INCOME	36,651	26,352	71,580	85,558
Net income (loss) attributable to the noncontrolling interests	(309)	(107)	(415)	106
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	36,342	26,245	71,165	85,664
Comprehensive income (loss)	36,613	26,409	71,464	85,804
Reportable legal entities | Sinclair Broadcast Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Selling, general and administrative	901	746	2,679	2,117
Depreciation, amortization and other operating expenses	348	382	1,038	1,148
Total operating expenses	1,249	1,128	3,717	3,265
Operating income	(1,249)	(1,128)	(3,717)	(3,265)
Equity in earnings of consolidated subsidiaries	40,547	26,435	76,623	86,991
Interest expense	(203)	(341)	(903)	(999)
Other income (expense)	996	869	3,029	2,192
Total other expense	41,340	26,963	78,749	88,184
Income tax (provision) benefit	(3,749)	326	(3,867)	745
Income (loss) from discontinued operations		84
NET INCOME	36,342	26,245	71,165	85,664
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	36,342	26,245	71,165	85,664
Comprehensive income (loss)	36,613	26,409	71,464	85,804
Reportable legal entities | Sinclair Television Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Program and production	112	278	207	291
Selling, general and administrative	14,712	13,157	34,840	38,720
Depreciation, amortization and other operating expenses	629	618	1,558	1,282
Total operating expenses	15,453	14,053	36,605	40,293
Operating income	(15,453)	(14,053)	(36,605)	(40,293)
Equity in earnings of consolidated subsidiaries	55,128	50,171	164,370	156,249
Interest expense	(37,123)	(32,560)	(115,115)	(84,277)
Other income (expense)	6,772	43	3,141	53
Total other expense	24,777	17,654	52,396	72,025
Income tax (provision) benefit	16,667	19,872	47,645	38,414
Income (loss) from discontinued operations	6,108	(68)	11,063	(202)
NET INCOME	32,099	23,405	74,499	69,944
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	32,099	23,405	74,499	69,944
Comprehensive income (loss)	32,061	23,462	74,383	70,190
Reportable legal entities | Guarantor Subsidiaries and KDSM, LLC
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Net revenue	319,767	246,531	887,489	694,520
Program and production	99,186	63,777	269,360	190,169
Selling, general and administrative	64,300	36,720	167,654	102,075
Depreciation, amortization and other operating expenses	68,820	53,819	186,926	150,636
Total operating expenses	232,306	154,316	623,940	442,880
Operating income	87,461	92,215	263,549	251,640
Equity in earnings of consolidated subsidiaries	60
Interest expense	(1,269)	(1,291)	(3,607)	(3,695)
Other income (expense)	(6,710)	40	(19,433)	85
Total other expense	(7,919)	(1,251)	(23,040)	(3,610)
Income tax (provision) benefit	(22,236)	(39,396)	(73,267)	(88,485)
Income (loss) from discontinued operations	(8)	(141)	495	24
NET INCOME	57,298	51,427	167,737	159,569
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	57,298	51,427	167,737	159,569
Comprehensive income (loss)	57,298	51,427	167,737	159,569
Reportable legal entities | Non-Guarantor Subsidiaries
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Net revenue	32,970	14,364	90,402	44,179
Program and production	13,870	(1)	28,489	158
Selling, general and administrative	2,386	908	14,627	2,999
Depreciation, amortization and other operating expenses	19,143	12,508	50,691	39,636
Total operating expenses	35,399	13,415	93,807	42,793
Operating income	(2,429)	949	(3,405)	1,386
Interest expense	(6,538)	(6,352)	(19,027)	(18,651)
Other income (expense)	1,085	1,597	4,990	7,751
Total other expense	(5,453)	(4,755)	(14,037)	(10,900)
Income tax (provision) benefit	929	105	2,597	7,141
NET INCOME	(6,953)	(3,701)	(14,845)	(2,373)
Net income (loss) attributable to the noncontrolling interests	(309)	(107)	(415)	106
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	(7,262)	(3,808)	(15,260)	(2,267)
Comprehensive income (loss)	(7,262)	(3,808)	(15,260)	(2,267)
Eliminations
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
Net revenue	(14,093)	(2,181)	(42,475)	(6,537)
Program and production	(14,229)	(2,349)	(32,990)	(6,520)
Selling, general and administrative	(75)	(76)	(9,644)	(283)
Depreciation, amortization and other operating expenses	(4,307)	(171)	(803)	(447)
Total operating expenses	(18,611)	(2,596)	(43,437)	(7,250)
Operating income	4,518	415	962	713
Equity in earnings of consolidated subsidiaries	(95,735)	(76,606)	(240,993)	(243,240)
Interest expense	5,266	5,250	15,623	15,621
Other income (expense)	(84)	(83)	(6,468)	(340)
Total other expense	(90,553)	(71,439)	(231,838)	(227,959)
Income tax (provision) benefit	(3,900)		3,900
NET INCOME	(82,135)	(71,024)	(226,976)	(227,246)
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP	(82,135)	(71,024)	(226,976)	(227,246)
Comprehensive income (loss)	$ (82,097)	$ (71,081)	$ (226,860)	$ (227,492)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 5) (USD $) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Jun. 30, 2013	Sep. 30, 2013	Sep. 30, 2012
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Release of valuation allowance related to state NOL carryforwards	$ 5.3		$ 5.3
Income tax provision upon finalization of the 2012 federal income tax return	2.2		2.2
Reduction in liability for unrecognized tax benefit, discontinued operation	6.1	5.1	11.2
Release of valuation allowance related to tax assets of Cunningham VIE				$ 7.7

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FAIR VALUE MEASUREMENTS: (Tables)

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS:

Schedule of carrying value and fair value of notes and debentures

The carrying value and fair value of our notes and debentures for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Level 2:
9.25% Senior Second Lien Notes due 2017	$	491,709	$	531,875	$	490,517	$	552,500
8.375% Senior Notes due 2018	235,129		237,506		234,853		265,886
6.125% Senior Unsecured Notes due 2022	500,000		503,125		500,000		533,125
5.375% Senior Unsecured Notes due 2021	600,000		574,500		—		—
Term Loan A	55,000		54,753		263,875		262,556
Term Loan B	398,000		394,178		580,850		589,125
Deerfield Bank Credit Facility	24,694		24,898		19,950		19,950

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 36,651	$ 26,352	$ 71,580	$ 85,558
Amortization of net periodic pension benefit costs, net of taxes	(38)	57	(116)	246
Comprehensive income	36,613	26,409	71,464	85,804
Comprehensive (income) loss attributable to the noncontrolling interests	(309)	(107)	(415)	106
Comprehensive income attributable to Sinclair Broadcast Group	$ 36,304	$ 26,302	$ 71,049	$ 85,910

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CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) (Parenthetical) (4.875% Convertible Debentures)	Sep. 30, 2013
4.875% Convertible Debentures
Interest rate (as a percent)	4.875%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

9 Months Ended

Sep. 30, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and VIEs for which we are the primary beneficiary.  Noncontrolling interests represents a minority owner’s proportionate share of the equity in certain of our consolidated entities.  All intercompany transactions and account balances have been eliminated in consolidation.

Discontinued Operations

In accordance with Financial Accounting Standards Board’s (FASB) guidance on reporting assets held for sale, we reported the financial position and results of operations of our stations in Lansing, Michigan (WLAJ-TV) and Providence, Rhode Island (WLWC-TV), as assets and liabilities held for sale in the accompanying consolidated balance sheets and discontinued operations consolidated statements of operations.  Discontinued operations have not been segregated in the consolidated statements of cash flows and, therefore, amounts for certain captions will not agree with the accompanying consolidated balance sheets and consolidated statements of operations. WLAJ-TV was acquired in the second quarter of 2012 in connection with the acquisition of the television stations from Freedom Communications (Freedom). WLWC-TV was acquired in the first quarter of 2012 in connection with the acquisition of the television stations from Four Points Media Group LLC (Four Points). See Note 2. Acquisitions for more information.  In October 2012, we entered into an agreement to sell all the assets of WLAJ-TV to an unrelated third party for $14.4 million.  In January 2013, we entered into an agreement to sell the assets of WLWC-TV to an unrelated third party for $13.8 million.  The operating results of WLAJ-TV, which was sold effective March 1, 2013, and WLWC-TV, which was sold effective April 1, 2013, are not included in our consolidated results of operations from continuing operations for the three and nine months ending September 30, 2013 and 2012. Total revenues for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, were $0.6 million and $1.6 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the three months ending September 30, 2012, are $1.1 million and $1.8 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are $2.2 million and $4.7 million, respectively.  Total income before taxes for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, are $0.2 million and $0.4 million, respectively, and total income(loss) before taxes of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are less than $(0.1) million and $0.1 million, respectively.  The resulting gain on the sale of these stations in 2013 was negligible.

Additionally, we recognized a $6.1 and $11.2 million income tax benefit for the three and nine months ended September 30, 2013, respectively, attributable to the adjustment of certain liabilities for unrecognized tax benefits related to discontinued operations. See discussion under Income Taxes below.

Interim Financial Statements

The consolidated financial statements for the three and nine months ended September 30, 2013 and 2012 are unaudited.  In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statement of equity (deficit) and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (SEC), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.  The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

Variable Interest Entities

In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE.  We consolidate VIEs when we are the primary beneficiary.  The assets of each of our consolidated VIEs can only be used to settle the obligations of the VIE. All the liabilities, including debt held by our VIEs, are non-recourse to us except for Cunningham Broadcasting Company’s (Cunningham) and Deerfield Media, Inc.’s (Deerfield) debt which we guarantee.

We have entered into local marketing agreements (LMAs) to provide programming, sales and managerial services for television stations of Cunningham, the license owner of seven television stations as of September 30, 2013.  We pay LMA fees to Cunningham and also reimburse all operating expenses.  We also have an acquisition agreement in which we have a purchase option to buy the license assets of the television stations which includes the Federal Communication Commission (FCC) license and certain other assets used to operate the station (License Assets).  Our applications to acquire the FCC licenses are pending approval.  We own the majority of the non-license assets of the Cunningham stations and our Bank Credit Agreement contains certain default provisions whereby insolvency of Cunningham would cause an event of default under our Bank Credit Agreement.  We have determined that the Cunningham stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and the cross-default provisions with our Bank Credit Agreement, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Cunningham.  See Note 6. Related Person Transactions for more information on our arrangements with Cunningham.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $25.9 million and $25.5 million, respectively, that relate to LMAs with Cunningham.  For the nine months ended September 30, 2013 and 2012, Cunningham’s stations provided us with approximately $80.3 million and $73.5 million, respectively, of net broadcast revenues.

We have entered into joint sales agreements (JSAs), shared services agreements (SSAs), and LMAs to provide certain services for the television stations of Deerfield, the license owner of eight television stations as of September 30, 2013.  The initial term of each of the JSAs and SSAs is eight years from the commencement and the agreements may be automatically renewed for successive eight year renewal terms.  We also have purchase options to buy the License Assets of the television stations. We own the majority of the non-license assets of the Deerfield stations and we have also guaranteed the debt of Deerfield.  Additionally, there are leases in place whereby Deerfield leases assets owned by us in order to perform its duties under FCC rules. We have determined that the Deerfield stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and our guarantee of Deerfield’s debt, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Deerfield.  Included in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2013 are net revenues of $20.8 million and $59.8 million, respectively, that relate to agreements with Deerfield.

We have outsourcing agreements with certain other license owners, under which we provide certain non-programming related sales, operational and administrative services.  We pay a fee to the license owners based on a percentage of broadcast cash flow and we reimburse all operating expenses.  We also have purchase options to buy the License Assets of these television stations.  We have determined that the License Assets of these stations are VIEs, and, based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the sales and managerial services we provide and because we absorb losses and returns that would be considered significant to the VIEs.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $11.1 million and $2.6 million, respectively, that relate to these arrangements. For the nine months ended September 30, 2013 and 2012, net broadcast revenues of $30.3 million and $11.9 million, respectively, related to these arrangements.

As of the dates indicated, the carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets for the periods presented (in thousands):

	As of September 30,2013		As of December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,243	$	3,805
Accounts receivable	1,608		110
Income taxes receivable	—		94
Current portion of program contract costs	6,529		6,113
Prepaid expenses and other current assets	221		124
Total current asset	19,601		10,246
PROGRAM CONTRACT COSTS, less current portion	2,380		1,484
PROPERTY AND EQUIPMENT, net	14,739		10,806
RESTRICTED CASH	2,102		—
GOODWILL	13,812		6,357
BROADCAST LICENSES	16,832		14,927
DEFINITE-LIVED INTANGIBLE ASSETS, net	67,237		51,368
OTHER ASSETS	12,242		12,723
Total assets	$	148,945	$	107,911
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	28	$	15
Accrued liabilities	1,130		186
Current portion of notes payable, capital leases and commercial bank financing	5,039		2,123
Current portion of program contracts payable	8,224		8,991
Total current liabilities	14,421		11,315
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	45,122		20,238
Program contracts payable, less current portion	2,954		2,080
Total liabilities	$	62,497	$	33,633

The amounts above represent the consolidated assets and liabilities of the VIEs related to our LMAs, JSAs, SSAs and other outsourcing agreements, as discussed above, for which we are the primary beneficiary, and have been aggregated as they all relate to our broadcast business.  Excluded from the amounts above are payments made to Cunningham under the LMAs which are treated as a prepayment of the purchase price of the stations and capital leases between us and Cunningham which are eliminated in consolidation.  The total payments made under these LMAs as of September 30, 2013 and December 31, 2012, which are excluded from liabilities above, were $32.4 million and $29.8 million, respectively.  The total capital lease liabilities excluded from above were $11.6 million and $11.7 million as of September 30, 2013 and December 31, 2012, respectively.  During the nine months ended September 30, 2013, Cunningham sold a portion of its investment in our Class A Common Stock which is eliminated in consolidation and excluded from assets shown above, for $7.0 million, net of income taxes and has been reflected as an increase in additional paid in capital in the consolidated balance sheet.  Also excluded from the amounts above are liabilities associated with the JSAs, SSAs, and option agreements with the other VIEs totaling $45.2 million and $36.2 million as of September 30, 2013 and December 31, 2012, respectively, as these amounts are eliminated in consolidation.  The risk and reward characteristics of the VIEs are similar.

In the fourth quarter of 2011, we began providing sales, programming and management services to the Freedom stations pursuant to a LMA.  Effective April 1, 2012, we completed the acquisition of the Freedom stations and the LMA was terminated. We determined that the Freedom stations were VIEs during the period of the LMA based on the terms of the agreement.  We were not the primary beneficiary because the owner of the stations had the power to direct the activities of the VIEs that most significantly impacted the economic performance of the VIEs.  In the consolidated statements of operations for the nine months ended September 30, 2012 are net broadcast revenues of $10.0 million and station production expenses of $7.8 million related to the Freedom LMAs during the second quarter of 2012.

We have investments in other real estate ventures and investment companies which are considered VIEs.  However, we do not participate in the management of these entities including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.  We account for these entities using the equity or cost method of accounting.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying amount		Maximum exposure		Carrying amount		Maximum exposure
Investments in real estate ventures	$	3,545	$	3,545	$	3,648	$	3,648
Investments in investment companies	26,064		26,064		27,335		27,335
Total	$	29,609	$	29,609	$	30,983	$	30,983

The carrying amounts above are included in other assets in the consolidated balance sheets.  The income and loss related to these investments are recorded in income from equity and cost method investments in the consolidated statement of operations.  We recorded income of $0.7 million and $0.3 million in the three months ended September 30, 2013 and 2012, respectively.  We recorded income of $1.4 million and $7.0 million for the nine months ended September 30, 2013 and 2012, respectively.

Our maximum exposure is equal to the carrying value of our investments.  As of September 30, 2013 and December 31, 2012, our unfunded commitments related to private equity investment funds totaled $16.9 million and $8.9 million, respectively.

Recent Accounting Pronouncements

In July 2012, the FASB issued new guidance for testing indefinite-lived intangible assets for impairment.  The new guidance allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar to the approach now applied to goodwill.  Companies can first determine based on certain qualitative factors whether it is “more likely than not” (a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired.  The new standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets for impairment.  The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 30, 2012 and early adoption is permitted. We adopted this new guidance in the fourth quarter of 2012 when completing our annual impairment analysis. This guidance impacted how we perform our annual impairment testing for indefinite-lived intangible assets and changed our related disclosures for 2012; however, it does not have an impact on our consolidated financial statements as the guidance does not impact the timing or amount of any resulting impairment charges.

In February 2013, the FASB issued new guidance requiring disclosure of items reclassified out of accumulated other comprehensive income (AOCI).  This new guidance requires entities to present (either on the face of the income statement or in the notes) the effects on the line items of the income statement for amounts reclassified out of AOCI.  The new guidance is effective for annual and interim periods beginning after December 15, 2012.  This guidance does not have a material impact on our financial statements.

In July 2013, the FASB issued new guidance requiring new disclosure of unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a company does not have: (i) a net operating loss carryforward; (ii) a similar tax loss; or (iii) a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The authoritative guidance is effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2013 and should be applied on a prospective basis. We are currently evaluating the impact of this requirement on our financial statements.

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities.  Actual results could differ from those estimates.

Restricted Cash

During the nine months ending September 2013, we deposited $40.6 million into escrow accounts pursuant to agreements for the acquisitions of Barrington, TTBG, and New Age.  See Note 3. Commitments and Contingencies for more information on these pending acquisitions.  These escrow deposits are classified as restricted cash within noncurrent assets in the consolidated balance sheet as of September 30, 2013.

Additionally, under the terms of certain lease agreements, as of September 30, 2013 and December 31, 2012, we were required to hold $0.2 million of restricted cash related to the removal of analog equipment from some of our leased towers.

Revenue Recognition

Total revenues include: (i) cash and barter advertising revenues, net of agency commissions; (ii) retransmission consent fees; (iii) network compensation; (iv) other broadcast revenues and (v) revenues from our other operating divisions.

Advertising revenues, net of agency commissions, are recognized in the period during which time spots are aired.

Our retransmission consent agreements contain both advertising and retransmission consent elements.  We have determined that our retransmission consent agreements are revenue arrangements with multiple deliverables.  Advertising and retransmission consent deliverables sold under our agreements are separated into different units of accounting at fair value.   Revenue applicable to the advertising element of the arrangement is recognized similar to the advertising revenue policy noted above.  Revenue applicable to the retransmission consent element of the arrangement is recognized over the life of the agreement.

Network compensation revenue is recognized over the term of the contract. All other revenues are recognized as services are provided.

Income Taxes

Our income tax provision for all periods consists of federal and state income taxes.  The tax provision for the three and nine months ended September 30, 2013 and 2012 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized.  In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income.  In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis.  A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months and nine months ended September 30, 2013 was lower than the statutory rate primarily due to: 1) a release of a valuation allowance related to state NOL carryforwards, of $5.3 million, net of taxes, due to a law change in a state tax jurisdiction, effective for years beginning after December 31, 2014, which we expect will significantly increase the forecasted future taxable income attributable to that state and result in utilization of the state NOL carryforwards and 2) a $2.2 million adjustment to the income tax provision upon finalization of the 2012 federal income tax return, primarily related to higher than originally projected available income tax deductions.

Our effective income tax rate for the three months ended September 30, 2012 was greater than the statutory rate primarily due to an increase in the income tax reserves related to a state audit settlement in 2012.

Our effective income tax rate nine months ended September 30, 2012 was lower than the statutory rate primarily due to a release of valuation allowance of $7.7 million related to certain deferred tax assets of Cunningham as the weight of all available evidence supports realization of the deferred tax assets. The valuation allowance release determination was based primarily on the sufficiency of forecasted taxable income necessary to utilize NOLs expiring in years 2022 — 2029.  This VIE files separate income tax returns.  Any resulting tax liabilities are nonrecourse to us and we are not entitled to any benefit resulting from the deferred tax assets of the VIE.

As previously discussed above under Discontinued Operations, during the three months ended September 30, 2013, we reduced our liability for unrecognized tax benefits by $6.1 million related to discontinued operations, as we now believe that it is more likely than not that our previously unrecognized state tax position would be sustained upon review of the state tax authority, based on new information obtained during the period.  Additionally, during the second quarter of 2013, we reduced our liability for unrecognized tax benefits by $5.1 million related to discontinued operations, upon the application of limits under an available state administrative practice exception.

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the current year’s presentation.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:
Net income	$ 71,580	$ 85,558
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation of property and equipment	47,108	35,527
Amortization of definite-lived intangible and other assets	48,727	26,877
Amortization of program contract costs and net realizable value adjustments	56,746	44,247
Loss on extinguishment of debt	16,283	335
Deferred tax (benefit)	(1,486)	(523)
Change in assets and liabilities, net of acquisitions:
(Increase) decrease in accounts receivable, net	(37,359)	9,801
Increase in prepaid expenses and other current assets	(3,925)	(11,375)
Increase in other assets	(4,312)	(20,354)
(Decrease) increase in accounts payable and accrued liabilities	28,024	21,637
(Decrease) increase in income taxes payable	(1,182)	6,953
Increase in other long-term liabilities	(2,282)	2,657
Payments on program contracts payable	(67,407)	(52,312)
Original debt issuance discount paid	(10,285)
Other, net	10,409	14,276
Net cash flows from operating activities	150,639	163,304
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(28,776)	(30,157)
Payments for acquisition of television stations	(495,440)	(590,917)
Payments for acquisitions in other operating divisions	(4,650)
Purchase of alarm monitoring contracts	(11,928)	(7,343)
Proceeds from sale of broadcast assets	27,992
(Increase) decrease in restricted cash	(41,032)	15,849
Distributions from equity and cost method investees	4,321	9,514
Investments in equity and cost method investees	(10,205)	(6,176)
Other, net	2,976	(33)
Net cash flows used in investing activities	(556,742)	(609,263)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	1,198,815	615,707
Repayments of notes payable, commercial bank financing and capital leases	(998,085)	(95,845)
Proceeds from the sale of Class A Common Stock	472,400
Proceeds from exercise of stock options, including excess tax benefits of share based payments of $0.5 million and $0.2 million, respectively	1,688	327
Dividends paid on Class A and Class B Common Stock	(41,938)	(31,245)
Payments for deferred financing costs	(20,205)	(8,364)
Proceeds from Class A Common Stock sold by variable interest entity	10,908
Noncontrolling interests distributions	(9,939)	(734)
Repayments of notes and capital leases to affiliates	(1,412)	(2,229)
Net cash flows from (used in) financing activities	612,232	477,617
NET INCREASE IN CASH AND CASH EQUIVALENTS	206,129	31,658
CASH AND CASH EQUIVALENTS, beginning of period	22,865	12,967
CASH AND CASH EQUIVALENTS, end of period	$ 228,994	$ 44,625

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS: (Details 3) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$ 150,639	$ 163,304
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(28,776)	(30,157)
Payments for acquisitions of television stations	(495,440)	(590,917)
Payments for acquisitions in other operating divisions	(4,650)
Purchase of alarm monitoring contracts	(11,928)	(7,343)
Proceeds from sale of broadcast assets	27,992
Decrease in restricted cash	(41,032)	15,849
Other, net	(2,908)	3,305
Net cash flows used in investing activities	(556,742)	(609,263)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	1,198,815	615,707
Repayments of notes payable, commercial bank financing and capital leases	(998,085)	(95,845)
Proceeds from the sale of common stock	472,400
Dividends paid on Class A and Class B Common Stock	(41,938)	(31,245)
Other, net	(18,960)	(11,000)
Net cash flows from (used in) financing activities	612,232	477,617
NET INCREASE IN CASH AND CASH EQUIVALENTS	206,129	31,658
CASH AND CASH EQUIVALENTS, beginning of period	22,865	12,967
CASH AND CASH EQUIVALENTS, end of period	228,994	44,625
Reportable legal entities | Sinclair Broadcast Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	(3,042)	(460)
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Other, net	1,648	740
Net cash flows used in investing activities	1,648	740
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Repayments of notes payable, commercial bank financing and capital leases	(234)	(308)
Proceeds from the sale of common stock	472,400
Dividends paid on Class A and Class B Common Stock	(41,938)	(31,646)
Increase (decrease) in intercompany payables	(429,664)	32,087
Other, net	830	(413)
Net cash flows from (used in) financing activities	1,394	(280)
Reportable legal entities | Sinclair Television Group, Inc.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	(66,985)	(75,408)
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(2,253)	(2,458)
Decrease in restricted cash	(38,930)	15,849
Net cash flows used in investing activities	(41,183)	13,391
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	1,146,789	596,275
Repayments of notes payable, commercial bank financing and capital leases	(985,755)	(79,077)
Increase (decrease) in intercompany payables	154,648	(435,595)
Other, net	(20,205)	(8,364)
Net cash flows from (used in) financing activities	295,477	73,239
NET INCREASE IN CASH AND CASH EQUIVALENTS	187,309	11,222
CASH AND CASH EQUIVALENTS, beginning of period	7,230	188
CASH AND CASH EQUIVALENTS, end of period	194,539	11,410
Reportable legal entities | Guarantor Subsidiaries and KDSM, LLC
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	208,126	228,829
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(21,109)	(25,624)
Payments for acquisitions of television stations	(495,440)	(590,917)
Purchase of alarm monitoring contracts	1,114
Proceeds from sale of broadcast assets	27,992
Other, net	4,454	63
Net cash flows used in investing activities	(482,989)	(616,478)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Repayments of notes payable, commercial bank financing and capital leases	(802)	(458)
Dividends paid on Class A and Class B Common Stock	235
Increase (decrease) in intercompany payables	292,696	389,771
Other, net	(554)	(1,489)
Net cash flows from (used in) financing activities	291,575	387,824
NET INCREASE IN CASH AND CASH EQUIVALENTS	16,712	175
CASH AND CASH EQUIVALENTS, beginning of period	199	313
CASH AND CASH EQUIVALENTS, end of period	16,911	488
Reportable legal entities | Non-Guarantor Subsidiaries
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	(816)	9,428
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(5,414)	(2,075)
Payments for acquisitions in other operating divisions	(4,650)
Purchase of alarm monitoring contracts	(13,042)	(7,343)
Decrease in restricted cash	(2,102)
Other, net	1,898	2,502
Net cash flows used in investing activities	(23,310)	(6,916)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	52,026	19,432
Repayments of notes payable, commercial bank financing and capital leases	(11,294)	(16,002)
Increase (decrease) in intercompany payables	(4,549)	15,053
Other, net	(9,949)	(734)
Net cash flows from (used in) financing activities	26,234	17,749
NET INCREASE IN CASH AND CASH EQUIVALENTS	2,108	20,261
CASH AND CASH EQUIVALENTS, beginning of period	15,436	12,466
CASH AND CASH EQUIVALENTS, end of period	17,544	32,727
Eliminations
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	13,356	915
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Other, net	(10,908)
Net cash flows used in investing activities	(10,908)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Dividends paid on Class A and Class B Common Stock	(235)	401
Increase (decrease) in intercompany payables	(13,131)	(1,316)
Other, net	10,918
Net cash flows from (used in) financing activities	$ (2,448)	$ (915)

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 2) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012	Dec. 31, 2012		Dec. 31, 2011
Variable Interest Entities
Net broadcast revenues	$ 303,028,000		$ 225,023,000	$ 835,223,000		$ 633,493,000
Net revenue	338,644,000		258,714,000	935,416,000		732,162,000
CURRENT ASSETS:
Cash and cash equivalents	228,994,000		44,625,000	228,994,000		44,625,000	22,865,000		12,967,000
Accounts receivable	250,054,000			250,054,000			183,480,000
Current portion of program contract costs	82,583,000			82,583,000			56,581,000
Prepaid expenses and other current assets	14,780,000			14,780,000			7,404,000
Total current assets	587,582,000			587,582,000			304,448,000
PROGRAM CONTRACT COSTS, less current portion	30,249,000			30,249,000			12,767,000
PROPERTY AND EQUIPMENT, net	513,382,000			513,382,000			439,713,000
RESTRICTED CASH	41,257,000			41,257,000			225,000
GOODWILL	1,297,638,000			1,297,638,000			1,074,032,000
BROADCAST LICENSES	98,210,000			98,210,000			85,122,000
DEFINITE-LIVED INTANGIBLE ASSETS, net	819,678,000			819,678,000			623,406,000
OTHER ASSETS	229,677,000			229,677,000			189,984,000
Total assets	3,617,673,000	[1]		3,617,673,000	[1]		2,729,697,000	[1]
CURRENT LIABILITIES:
Accounts payable	14,412,000			14,412,000			10,086,000
Accrued liabilities	200,779,000			200,779,000			143,731,000
Current portion of notes payable, capital leases and commercial bank financing	16,622,000			16,622,000			47,622,000
Current portion of program contracts payable	99,900,000			99,900,000			88,015,000
Total current liabilities	340,711,000			340,711,000			307,600,000
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	2,436,386,000			2,436,386,000			2,210,866,000
Program contracts payable, less current portion	38,054,000			38,054,000			16,341,000
Total liabilities	3,201,435,000	[1]		3,201,435,000	[1]		2,829,750,000	[1]
Increase in additional paid in capital related to sale of investment in common stock				7,008,000
Eliminations
Variable Interest Entities
Net revenue	(14,093,000)		(2,181,000)	(42,475,000)		(6,537,000)
CURRENT ASSETS:
Total current assets	(3,327,000)			(3,327,000)			(4,005,000)
PROPERTY AND EQUIPMENT, net	(7,242,000)			(7,242,000)			(10,867,000)
Total assets	(3,057,459,000)			(3,057,459,000)			(2,161,241,000)
CURRENT LIABILITIES:
Total current liabilities	(1,016,000)			(1,016,000)			(3,634,000)
LONG-TERM LIABILITIES:
Total liabilities	(625,697,000)			(625,697,000)			(759,996,000)
Consolidated VIEs, aggregated
Variable Interest Entities
Net broadcast revenues	11,100,000		2,600,000	30,300,000		11,900,000
CURRENT ASSETS:
Cash and cash equivalents	11,243,000			11,243,000			3,805,000
Accounts receivable	1,608,000			1,608,000			110,000
Income taxes receivable							94,000
Current portion of program contract costs	6,529,000			6,529,000			6,113,000
Prepaid expenses and other current assets	221,000			221,000			124,000
Total current assets	19,601,000			19,601,000			10,246,000
PROGRAM CONTRACT COSTS, less current portion	2,380,000			2,380,000			1,484,000
PROPERTY AND EQUIPMENT, net	14,739,000			14,739,000			10,806,000
RESTRICTED CASH	2,102,000			2,102,000
GOODWILL	13,812,000			13,812,000			6,357,000
BROADCAST LICENSES	16,832,000			16,832,000			14,927,000
DEFINITE-LIVED INTANGIBLE ASSETS, net	67,237,000			67,237,000			51,368,000
OTHER ASSETS	12,242,000			12,242,000			12,723,000
Total assets	148,945,000			148,945,000			107,911,000
CURRENT LIABILITIES:
Accounts payable	28,000			28,000			15,000
Accrued liabilities	1,130,000			1,130,000			186,000
Current portion of notes payable, capital leases and commercial bank financing	5,039,000			5,039,000			2,123,000
Current portion of program contracts payable	8,224,000			8,224,000			8,991,000
Total current liabilities	14,421,000			14,421,000			11,315,000
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	45,122,000			45,122,000			20,238,000
Program contracts payable, less current portion	2,954,000			2,954,000			2,080,000
Total liabilities	62,497,000			62,497,000			33,633,000
Consolidated VIEs | Cunningham
Variable Interest Entities
Number of television stations owned	7			7
Net broadcast revenues	25,900,000		25,500,000	80,300,000		73,500,000
LONG-TERM LIABILITIES:
Increase in additional paid in capital related to sale of investment in common stock				7,000,000
Consolidated VIEs | Deerfield
Variable Interest Entities
Number of television stations owned	8			8
JSAs and SSAs initial term				8 years
JSAs and SSAs renewal terms				8 years
Net revenue	20,800,000			59,800,000
Consolidated VIEs | Eliminations
LONG-TERM LIABILITIES:
Liabilities associated with the JSAs, SSAs, and option agreements	45,200,000			45,200,000			36,200,000
Consolidated VIEs | Eliminations | Cunningham
LONG-TERM LIABILITIES:
Total payments made under the LMA excluded from liabilities	32,400,000			32,400,000			29,800,000
Total capital leased liabilities excluded from VIE consolidation	$ 11,600,000			$ 11,600,000			$ 11,700,000

[1] Our consolidated total assets as of September 30, 2013 and December 31, 2012 include total assets of variable interest entities (VIEs) of $148.9 million and $107.9 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2013 and December 31, 2012 include total liabilities of the VIEs of $16.4 million and $7.9 million, respectively, for which the creditors of the VIEs have no recourse to us.

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ACQUISITIONS (Details) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended					0 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended		1 Months Ended		1 Months Ended		1 Months Ended	0 Months Ended	3 Months Ended			9 Months Ended			1 Months Ended		1 Months Ended		1 Months Ended		1 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended	0 Months Ended						9 Months Ended	12 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	0 Months Ended		2 Months Ended	3 Months Ended	9 Months Ended		0 Months Ended			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 01, 2012 WLYH in Harrisburg, PA	Sep. 30, 2012 WLWC-TV	Sep. 30, 2013 WLWC-TV	Sep. 30, 2012 WLWC-TV	Dec. 01, 2012 WSTR and KMYS Deerfield item	Sep. 30, 2012 WLAJ-TV	Sep. 30, 2013 WLAJ-TV	Sep. 30, 2012 WLAJ-TV	Sep. 30, 2013 6.125% Notes	Jun. 28, 2013 6.125% Notes	Oct. 31, 2012 6.125% Notes	Jan. 02, 2012 Four Points item	Sep. 30, 2013 Four Points	Sep. 30, 2012 Four Points	Sep. 30, 2013 Four Points	Sep. 30, 2012 Four Points	Dec. 31, 2011 Four Points	Jan. 31, 2012 Four Points Network affiliations	Jan. 02, 2012 Four Points Network affiliations	Jan. 31, 2012 Four Points Decaying advertiser base	Jan. 02, 2012 Four Points Decaying advertiser base	Jan. 31, 2012 Four Points Other intangible assets	Jan. 02, 2012 Four Points Other intangible assets	Jan. 31, 2012 Four Points Term Loan B	Apr. 02, 2012 Freedom item	Sep. 30, 2013 Freedom	Sep. 30, 2012 Freedom	Mar. 31, 2012 Freedom	Sep. 30, 2013 Freedom	Sep. 30, 2012 Freedom	Dec. 31, 2011 Freedom	Apr. 30, 2012 Freedom Network affiliations	Apr. 02, 2012 Freedom Network affiliations	Apr. 30, 2012 Freedom Decaying advertiser base	Apr. 02, 2012 Freedom Decaying advertiser base	Apr. 30, 2012 Freedom Other intangible assets	Apr. 02, 2012 Freedom Other intangible assets	Apr. 30, 2012 Freedom Term Loan A	Apr. 30, 2012 Freedom Term Loan B	Dec. 01, 2012 Newport item	Sep. 30, 2013 Newport	Sep. 30, 2013 Newport	Dec. 01, 2012 Newport Network affiliations	Dec. 01, 2012 Newport Decaying advertiser base	Dec. 01, 2012 Newport Other intangible assets	Dec. 01, 2012 Newport 6.125% Notes	Dec. 01, 2012 WPMI and WJTC Deerfield	Feb. 01, 2013 WHAM Deerfield	Sep. 30, 2013 Other acquisitions item	Dec. 31, 2012 Other acquisitions item	Sep. 30, 2013 WTTA-TV	Sep. 30, 2013 WTTA-TV	Dec. 31, 2012 WTTA-TV	May 31, 2013 CMG item	Aug. 08, 2013 Fisher Communications item	Sep. 30, 2013 Fisher Communications	Sep. 30, 2013 Fisher Communications	Sep. 30, 2013 Fisher Communications	Sep. 30, 2013 Fisher Communications KIDK and KXPI item	Aug. 08, 2013 Fisher Communications Network affiliations	Aug. 08, 2013 Fisher Communications Decaying advertiser base	Aug. 08, 2013 Fisher Communications Other intangible assets	Sep. 30, 2013 TTBG LLC item	Oct. 02, 2013 TTBG LLC item
Acquisitions
Number of television stations																7													8															7									8	5					22				2				2	2
Number of markets																4													7															6									6	3				4	8								1
Number of radio stations in Seattle market																																																											4
Cash paid for acquisition (in dollar per share)																																																											$ 41.0
Cash paid																$ 200,000,000													$ 385,000,000															$ 460,500,000									$ 136,900,000	$ 45,100,000					$ 373,200,000
Working capital adjustment																(900,000)													300,000															(1,300,000)									(4,400,000)	(700,000)
Non-controlling interests related to, and amounts paid by certain VIE's for, the license assets																																																					3,100,000	4,400,000
Amount of draw under incremental loan commitment used to finance acquisition																												180,000,000														157,500,000	192,500,000
Escrow deposit used to fund acquisition																20,000,000													38,500,000															41,300,000
Interest rate (as a percent)													6.125%	6.125%	6.125%																																			6.125%
Number of stations whose license assets were sold									2
Price of assets acquired/sold					200,000				10,700,000																																										6,000,000	6,000,000											5,900,000
Estimated projected benefit obligation																																																											23,500,000
Estimated discount rate (as a percent)																																																											3.60%
Estimated fair value of annuity contracts and cash surrender value of the life insurance policies																																																											17,900,000
Allocated fair value of acquired assets and assumed liabilities
Cash																																																											13,531,000
Accounts Receivable																																																											29,962,000
Prepaid expenses and other current assets																456,000													373,000															1,390,000									1,991,000	160,000					2,079,000
Program contract costs																3,731,000													3,520,000															10,378,000									7,594,000	1,638,000					10,954,000
Property and equipment																34,578,000													54,109,000															53,883,000									35,439,000	16,545,000					48,616,000
Broadcast licenses																10,658,000													10,424,000															15,581,000									1,611,000	2,679,000					11,058,000
Definite-lived intangible assets																93,800,000							66,900,000		9,800,000		17,100,000		140,963,000								93,100,000		25,100,000		22,800,000			240,013,000			176,000,000	23,700,000	40,300,000				48,049,000	22,546,000					156,332,000					100,600,000	15,000,000	40,800,000
Other assets																548,000													278,000															1,097,000															24,632,000
Assets Held for Sale																																																											5,900,000
Accrued liabilities																(381,000)													(589,000)															(3,928,000)									(2,086,000)	(1,178,000)
Accounts payable and accrued liabilities																																																											(20,342,000)
Program contracts payable																(5,157,000)													(3,404,000)															(11,634,000)									(7,625,000)	(4,252,000)					(10,954,000)
Deferred Tax Liability																																																											(50,416,000)
Other long-term liabilities																																																											(25,482,000)
Fair value of identifiable net assets acquired																138,233,000													205,674,000															306,780,000									84,973,000	38,138,000					195,870,000
Goodwill																60,843,000													179,609,000															164,621,000									50,674,000	10,661,000					177,326,000
Total																199,076,000													385,283,000															471,401,000									135,647,000	48,799,000					373,196,000
Goodwill deductible for tax purposes																																																											19,500,000
Amortization period																						15 years		10 years												15 years		10 years									15 years	10 years																15 years	10 years
Weighted average life																										14 years														16 years									14 years																	15 years
Amount paid for funding working capital needs																					8,100,000											9,600,000			1,500,000
Net broadcast revenues	303,028,000	225,023,000	835,223,000	633,493,000													17,900,000	18,700,000	54,300,000	52,900,000										26,200,000	26,800,000	10,000,000	79,900,000	52,500,000											36,100,000	109,300,000									29,500,000	47,000,000					25,900,000	25,900,000
Operating income (loss)	72,848,000	78,398,000	220,784,000	210,181,000													4,400,000	4,100,000	14,000,000	11,600,000										6,700,000	5,000,000		20,800,000	14,000,000											5,500,000	25,300,000									6,700,000	10,500,000					8,200,000	8,200,000
Severance expense related to executives and employees																																																												4,300,000
Net broadcast revenues						1,400,000	1,400,000	4,100,000		1,100,000	700,000	2,100,000
Operating income (loss)						(200,000)	200,000	100,000		(200,000)	100,000	0
Transaction costs	3,500,000		3,500,000
Revenue from discontinued operations excluded from pro forma revenues											1,000,000
Costs incurred in corporate, general and administrative expenses	100,000	400,000	1,000,000	900,000
Difference between the purchase price and the historical cost basis recorded as a reduction in additional paid-in capital																																																									23,600,000
Difference between the purchase price and the historical cost basis recorded as a reduction in additional paid-in capital, tax amount																																																									15,600,000
Pro Forma Information
Total revenues	354,545,000	335,849,000	1,030,175,000	972,305,000
Net Income	28,380,000	29,877,000	57,487,000	84,146,000
Net Income attributable to Sinclair Broadcast Group	$ 28,071,000	$ 29,733,000	$ 57,072,000	$ 84,139,000
Basic and diluted earnings per share attributable to Sinclair Broadcast Group (in dollars per share)	$ 0.28	$ 0.37	$ 0.70	$ 1.04

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SEGMENT DATA (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012	Dec. 31, 2012
SEGMENT DATA
Intercompany loans	$ 171,700,000		$ 171,200,000	$ 171,700,000		$ 171,200,000
Intercompany interest expense	5,000,000		5,000,000	15,000,000		14,900,000
Segment data
Revenue	338,644,000		258,714,000	935,416,000		732,162,000
Depreciation of property and equipment	17,408,000		12,626,000	47,108,000		34,031,000
Amortization of definite-lived intangible assets and other assets	17,168,000		10,562,000	48,727,000		26,375,000
Amortization of program contract costs and net realizable value adjustments	19,229,000		14,296,000	56,746,000		43,565,000
General and administrative overhead expenses	16,109,000		8,286,000	38,806,000		25,166,000
Operating income (loss)	72,848,000		78,398,000	220,784,000		210,181,000
Interest expense	39,867,000		35,294,000	123,029,000		92,001,000
Income from equity and cost method investments	1,571,000		1,919,000	115,000		8,343,000
Assets	3,617,673,000	[1]		3,617,673,000	[1]		2,729,697,000	[1]
Operating segments | Broadcast
Segment data
Number of markets				58
Revenue	323,681,000		246,202,000	896,153,000		693,553,000
Depreciation of property and equipment	16,579,000		11,864,000	44,739,000		31,768,000
Amortization of definite-lived intangible assets and other assets	15,851,000		9,556,000	45,089,000		23,021,000
Amortization of program contract costs and net realizable value adjustments	19,229,000		14,296,000	56,746,000		43,565,000
General and administrative overhead expenses	14,633,000		7,325,000	34,991,000		21,932,000
Operating income (loss)	74,210,000		78,988,000	224,652,000		213,618,000
Assets	3,303,838,000			3,303,838,000
Operating segments | Other Operating Divisions
Segment data
Revenue	14,963,000		12,512,000	39,263,000		38,609,000
Depreciation of property and equipment	481,000		380,000	1,330,000		1,115,000
Amortization of definite-lived intangible assets and other assets	1,317,000		1,006,000	3,638,000		3,354,000
General and administrative overhead expenses	576,000		215,000	1,136,000		1,130,000
Operating income (loss)	(113,000)		538,000	(150,000)		(172,000)
Interest expense	846,000		962,000	2,385,000		2,517,000
Income from equity and cost method investments	1,571,000		1,919,000	115,000		8,343,000
Assets	306,204,000			306,204,000
Corporate
Segment data
Depreciation of property and equipment	348,000		382,000	1,039,000		1,148,000
General and administrative overhead expenses	900,000		746,000	2,679,000		2,104,000
Operating income (loss)	(1,249,000)		(1,128,000)	(3,718,000)		(3,265,000)
Interest expense	39,021,000		34,332,000	120,644,000		89,484,000
Assets	$ 7,631,000			$ 7,631,000

[1] Our consolidated total assets as of September 30, 2013 and December 31, 2012 include total assets of variable interest entities (VIEs) of $148.9 million and $107.9 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2013 and December 31, 2012 include total liabilities of the VIEs of $16.4 million and $7.9 million, respectively, for which the creditors of the VIEs have no recourse to us.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 3,068,000	$ 3,091,000
Total assets of variable interest entities (in dollars)	148,900,000	107,900,000
Total liabilities of variable interest entities (in dollars)	$ 16,400,000	$ 7,900,000
Class A Common Stock
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	500,000,000	500,000,000
Common Stock, shares issued	73,900,442	52,332,012
Common Stock, shares outstanding	73,900,442	52,332,012
Class B Common Stock
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	140,000,000	140,000,000
Common Stock, shares issued	26,262,210	28,933,859
Common Stock, shares outstanding	26,262,210	28,933,859

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NOTES PAYABLE AND COMMERCIAL BANK FINANCING

9 Months Ended

Sep. 30, 2013

NOTES PAYABLE AND COMMERCIAL BANK FINANCING

NOTES PAYABLE AND COMMERCIAL BANK FINANCING

4. NOTES PAYABLE AND COMMERCIAL BANK FINANCING

Bank Credit Agreement

On April 9, 2013, we entered into an amendment and restatement (the April Amendment) of our credit agreement (as amended, the April Bank Credit Agreement).  Pursuant to the April Amendment, we refinanced the existing facility and replaced the existing term loans under the facility with a new $500.0 million term loan A facility (Term Loan A), maturing April 2018 and priced at LIBOR plus 2.25%; and a $400.0 million term loan B facility (Term Loan B), maturing April 2020 and priced at LIBOR plus 2.25% with a LIBOR floor of 0.75%.

In addition, we replaced our existing revolving line of credit with a new $100.0 million revolving line of credit maturing April 2018 and priced at LIBOR plus 2.25%.  The proceeds from the term loans, along with cash on hand and/or a draw under the revolving line of credit, will be used to fund future acquisitions.

Due to timing related to the closing and funding requirements of the pending acquisitions, approximately $445.0 million of the new Term Loan A was drawn on a delayed basis, in October 2013.  We also amended certain terms of the April Bank Credit Agreement, including increased uncommitted incremental loan capacity, increased television station acquisition capacity and increased flexibility under the restrictive covenants.

We recognized a loss on extinguishment of the old facility, primarily related to the repayment of the previous term loan B with proceeds from the 5.375% Notes, of $16.3 million, consisting of deferred financing costs and debt discount.  Of the financing costs incurred related to the April Amendment, $9.7 million was capitalized as deferred financing costs and $2.4 million was charged to interest expense during the nine months ended September 30, 2013.  During the three months ended September 30, 2013, we revised the amount of capitalized fees originally recorded of $7.3 million to $9.7 million, resulting in a reduction in interest expense of $2.4 million during the third quarter.  The impact of the revision is not material to the financial statements of any period.

On October 23, 2013, we entered into an amendment and restatement (the October Amendment) of our bank credit agreement (as amended, the October Bank Credit Agreement). Pursuant to the amendment, we raised $450.0 million of incremental loans, which consisted of $200.0 million in incremental delayed draw term loan A loans, maturing April 2018 and priced at LIBOR plus 2.25%; and $250.0 million in incremental term loan B loans, maturing April 2020 and priced at LIBOR plus 2.25% with a LIBOR floor of 0.75%.  The October Amendment raised the total capacity of the term loan A and B loans to $700.0 million and $650.0 million, respectively.  In addition, we obtained an additional $57.5 million of capacity under our revolving line of credit maturing April 2018.  The terms loans are expected to be used to fund future acquisitions and for general corporate purposes.    We also amended certain terms of the Bank Credit Agreement, including increased uncommitted incremental loan capacity, increased television station acquisition capacity and increased flexibility under the restrictive covenants.  We expect to incur $10.6 million in financing costs related to the October Amendment, which we expect to capitalize as deferred financing costs.

6.375% Senior Notes, due 2021

On October 11, 2013, we issued $350.0 million in senior unsecured notes, which bear interest at a rate of 6.375% per annum and mature on November 1, 2021 (the 6.375% Notes), pursuant to an indenture dated October 11, 2013 (the 6.375% Indenture). The 6.375% Notes were priced at 100% of their par value and interest is payable semi-annually on May 1 and November 1, commencing on May 1, 2014. Prior to November 1, 2016, we may redeem the 6.375% Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium as set forth in the 6.375% Indenture. In addition, on or prior to November 1, 2016, we may redeem up to 35% of the 6.375% Notes using the proceeds of certain equity offerings. If we sell certain of our assets or experience specific kinds of changes of control, holder of the 6.375% Notes may require us to repurchase some or all of the Notes.  Upon the sale of certain of our assets or certain changes of control, the holders of the 6.375% Notes may require us to repurchase some or all of the notes.  The proceeds from the offering of the 6.375% Notes were used to partially fund the redemption of the 9.25% Senior Secured Second Lien Notes, Due 2017 (the 9.25% Notes), as discussed further below. Concurrent with entering into an indenture for the 6.375% Notes in October 2013, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 6.375% Notes for registered securities with the Securities and Exchange Commission (the SEC) by July 8, 2014.

5.375% Senior Unsecured Notes, due 2021

On April 2, 2013, we issued $600.0 million of senior unsecured notes, which bear interest at a rate of 5.375% per annum and mature on April 1, 2021 (the 5.375% Notes), pursuant to an indenture dated April 2, 2013 (the 5.375% Indenture).  The 5.375% Notes were priced at 100% of their par value and interest is payable semi-annually on April 1 and October 1, commencing on October 1, 2013.  Prior to April 1, 2016, we may redeem the 5.375% Notes, in whole or in part, at any time or from time to time at a price equal to 100% of the principal amount of the 5.375% Notes plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the 5.375% Indenture.  Beginning on April 1, 2016, we may redeem some or all of the 5.375% Notes at any time or from time to time at a redemption price set forth in the 5.375% Indenture.  In addition, on or prior to April 1, 2016, we may redeem up to 35% of the 5.375% Notes using proceeds of certain equity offerings.  Upon the sale of certain of our assets or certain changes of control, the holders of the 5.375% Notes may require us to repurchase some or all of the notes.  The net proceeds from the offering of the 5.375% Notes were used to pay down outstanding indebtedness under our bank credit facility. Concurrent with entering into an indenture for the 5.375% Notes in April 2013, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 5.375% Notes for registered securities with the Securities and Exchange Commission (the SEC) by December 28, 2013.  We filed a registration statement on Form S-4 with the SEC on April 4, 2013, which became effective on April 16, 2013.  An exchange offer was launched on May 23, 2013 to exchange the unregistered 5.375% Notes with the holders for 5.375% Notes registered under the Securities Act of 1933.  The exchange offer was completed on June 28, 2013 with 100% of the $600.0 million 5.375% Senior Unsecured Notes due 2021 tendered in the exchange offer.

6.125% Senior Unsecured Notes, due 2022

Concurrent with entering into an indenture for the 6.125% Notes in October 2012, we also entered into a registration rights agreement requiring us to complete an offer of an exchange of the 6.125% Notes for registered securities with the Securities and Exchange Commission (the SEC) by July 8, 2013.  We filed a registration statement on Form S-4 with the SEC on April 4, 2013 which became effective on April 16, 2013.  An exchange offer was launched on May 23, 2013 to exchange the unregistered 6.125% Notes with the holders for 6.125% Notes registered under the Securities Act of 1933.  The exchange offer was completed on June 28, 2013 with 100.0% of the $500.0 million 6.125% Senior Unsecured Notes due 2022 tendered in the exchange offer.

9.25% Convertible Senior Notes

Effective October 12, 2013, we redeemed all of the outstanding 9.25% Senior Secured Second Lien Notes, representing $500.0 million in aggregate principal amount.  Upon the redemption, along with the principal, we paid the accrued and unpaid interest and a make whole premium of $25.4 million, for a total of $546.1 million paid to noteholders.  We expect to record a loss on extinguishment of $43.1 million in the fourth quarter of 2013 related to this redemption.

4.875% Convertible Senior Notes, due 2018 and 3.0% Convertible Senior Notes, Due 2027

In September 2013, 100% of the outstanding 4.875% Convertible Senior Notes, due in 2018 (the 4.875% Notes), representing aggregate principal of $5.7 million, were converted into 388,632 shares of Class A Common Stock, as permitted under the indenture, resulting in an increase in additional paid-in capital of $7.3 million, net of income taxes.

In October 2013, 100% of the outstanding 3.0% Convertible Senior Notes, due in 2027 (the 3.0% Notes), representing aggregate principal of $5.4 million, were converted and settled fully in cash of $10.5 million, as permitted under the indenture.  As the original terms of the indenture included a cash conversion feature, the effective settlement of the liability and equity components will be accounted for separately.  We expect the redemption of the liability component to result in a $0.9 million gain on extinguishment, and the redemption of the equity component will be recorded as a reduction in additional paid-in capital, net of taxes.

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CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF OPERATIONS
Income (loss) from discontinued operations, income tax benefit (provision)	$ 6,107	$ (36)	$ 10,806	$ (220)

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 228,994		$ 22,865
Accounts receivable, net of allowance for doubtful accounts of $3,068 and $3,091, respectively	250,054		183,480
Affiliate receivable			416
Current portion of program contract costs	82,583		56,581
Prepaid expenses and other current assets	14,780		7,404
Deferred barter costs	5,271		3,345
Assets held for sale	5,900		30,357
Total current assets	587,582		304,448
PROGRAM CONTRACT COSTS, less current portion	30,249		12,767
PROPERTY AND EQUIPMENT, net	513,382		439,713
RESTRICTED CASH	41,257		225
GOODWILL	1,297,638		1,074,032
BROADCAST LICENSES	98,210		85,122
DEFINITE-LIVED INTANGIBLE ASSETS, net	819,678		623,406
OTHER ASSETS	229,677		189,984
Total assets	3,617,673	[1]	2,729,697	[1]
CURRENT LIABILITIES:
Accounts payable	14,412		10,086
Accrued liabilities	200,779		143,731
Income taxes payable	1,686		9,939
Current portion of notes payable, capital leases and commercial bank financing	16,622		47,622
Current portion of notes and capital leases payable to affiliates	2,271		1,704
Current portion of program contracts payable	99,900		88,015
Deferred barter revenues	5,005		3,499
Deferred tax liabilities	36		607
Liabilities held for sale			2,397
Total current liabilities	340,711		307,600
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	2,436,386		2,210,866
Notes payable and capital leases to affiliates, less current portion	19,619		13,187
Program contracts payable, less current portion	38,054		16,341
Deferred tax liabilities	302,914		233,465
Other long-term liabilities	63,751		48,291
Total liabilities	3,201,435	[1]	2,829,750	[1]
COMMITMENTS AND CONTINGENCIES (See Note 3)
SINCLAIR BROADCAST GROUP SHAREHOLDERS' EQUITY (DEFICIT):
Additional paid-in capital	1,097,098		600,928
Accumulated deficit	(684,470)		(713,697)
Accumulated other comprehensive loss	(5,109)		(4,993)
Total Sinclair Broadcast Group shareholders' equity (deficit)	408,521		(116,950)
Noncontrolling interests	7,717		16,897
Total equity (deficit)	416,238		(100,053)
Total liabilities and equity (deficit)	3,617,673		2,729,697
Class A Common Stock
SINCLAIR BROADCAST GROUP SHAREHOLDERS' EQUITY (DEFICIT):
Common Stock	739		523
Class B Common Stock
SINCLAIR BROADCAST GROUP SHAREHOLDERS' EQUITY (DEFICIT):
Common Stock	$ 263		$ 289

[1] Our consolidated total assets as of September 30, 2013 and December 31, 2012 include total assets of variable interest entities (VIEs) of $148.9 million and $107.9 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2013 and December 31, 2012 include total liabilities of the VIEs of $16.4 million and $7.9 million, respectively, for which the creditors of the VIEs have no recourse to us.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 3) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 VIEs which are not primary beneficiary	Sep. 30, 2012 VIEs which are not primary beneficiary	Sep. 30, 2013 VIEs which are not primary beneficiary	Sep. 30, 2012 VIEs which are not primary beneficiary	Dec. 31, 2012 VIEs which are not primary beneficiary	Jun. 30, 2012 Freedom	Sep. 30, 2012 Freedom	Sep. 30, 2013 Investments in real estate ventures	Dec. 31, 2012 Investments in real estate ventures	Sep. 30, 2013 Investments in investment companies	Dec. 31, 2012 Investments in investment companies
Variable Interest Entities
Net broadcast revenues	$ 303,028,000	$ 225,023,000	$ 835,223,000	$ 633,493,000							$ 10,000,000
Station production expenses	98,939,000	61,705,000	265,066,000	184,098,000						7,800,000
Carrying amount					29,609,000		29,609,000		30,983,000			3,545,000	3,648,000	26,064,000	27,335,000
Maximum exposure					29,609,000		29,609,000		30,983,000			3,545,000	3,648,000	26,064,000	27,335,000
Income from equity and cost method investments	1,571,000	1,919,000	115,000	8,343,000	700,000	300,000	1,400,000	7,000,000
Unfunded commitments related to private equity investment funds					$ 16,900,000		$ 16,900,000		$ 8,900,000

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

Schedule of reconciliation of income (numerator) and shares (denominator) used in computation of diluted earnings per share

The following table reconciles income (numerator) and shares (denominator) used in our computations of diluted earnings per share for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Income (Numerator)
Income from continuing operations	$	30,551		$	26,477		$	60,022		$	85,736
Income impact of assumed conversion of the 4.875% Notes, net of taxes	—			45			—			135
Net (income) loss attributable to noncontrolling interests included in continuing operations	(309		)	(107		)	(415		)	106
Numerator for diluted earnings per common share from continuing operations available to common shareholders	30,242			26,415			59,607			85,977
Income (loss) from discontinued operations, net of taxes	6,100			(125		)	11,558			(178		)
Numerator for diluted earnings available to common shareholders	$	36,342		$	26,290		$	71,165		$	85,799
Shares (Denominator)
Weighted-average common shares outstanding	99,473			81,081			90,982			80,990
Dilutive effect of stock settled appreciation rights, restricted stock awards and outstanding stock options	766			44			567			23
Dilutive effect of 4.875% Notes	—			254			—			254
Weighted-average common and common equivalent shares outstanding	100,239			81,379			91,549			81,267

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CONDENSED CONSOLIDATING FINANCIAL STATEMENTS: (Details) (USD $)	Sep. 30, 2013		Dec. 31, 2012		Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2013 5.375% Senior Unsecured Notes, due 2021	Jun. 28, 2013 5.375% Senior Unsecured Notes, due 2021	Apr. 02, 2013 5.375% Senior Unsecured Notes, due 2021	Sep. 30, 2013 6.125% Senior Unsecured Notes, due 2022	Jun. 28, 2013 6.125% Senior Unsecured Notes, due 2022	Oct. 31, 2012 6.125% Senior Unsecured Notes, due 2022	Sep. 30, 2013 8.375% Senior Notes due 2018	Oct. 12, 2013 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 6.375% Senior Notes, due 2021	Sep. 30, 2013 4.875% Notes	Sep. 30, 2013 3.0% Notes	Dec. 31, 2012 6.0% Notes	Sep. 30, 2013 Sinclair Broadcast Group, Inc.	Sep. 30, 2013 Sinclair Broadcast Group, Inc. 3.0% Notes	Sep. 30, 2013 Sinclair Television Group, Inc.	Sep. 30, 2013 Sinclair Television Group, Inc. 5.375% Senior Unsecured Notes, due 2021	Sep. 30, 2013 Sinclair Television Group, Inc. 6.125% Senior Unsecured Notes, due 2022	Sep. 30, 2013 Sinclair Television Group, Inc. 8.375% Senior Notes due 2018	Sep. 30, 2013 Sinclair Television Group, Inc. 9.25% Senior Secured Second Lien Notes due 2017	Sep. 30, 2013 Sinclair Television Group, Inc. 6.375% Senior Notes, due 2021	Sep. 30, 2013 Reportable legal entities Sinclair Broadcast Group, Inc.	Dec. 31, 2012 Reportable legal entities Sinclair Broadcast Group, Inc.	Sep. 30, 2013 Reportable legal entities Sinclair Television Group, Inc.	Dec. 31, 2012 Reportable legal entities Sinclair Television Group, Inc.	Sep. 30, 2012 Reportable legal entities Sinclair Television Group, Inc.	Dec. 31, 2011 Reportable legal entities Sinclair Television Group, Inc.	Sep. 30, 2013 Reportable legal entities Guarantor Subsidiaries and KDSM, LLC	Dec. 31, 2012 Reportable legal entities Guarantor Subsidiaries and KDSM, LLC	Sep. 30, 2012 Reportable legal entities Guarantor Subsidiaries and KDSM, LLC	Dec. 31, 2011 Reportable legal entities Guarantor Subsidiaries and KDSM, LLC	Sep. 30, 2013 Reportable legal entities Non-Guarantor Subsidiaries	Dec. 31, 2012 Reportable legal entities Non-Guarantor Subsidiaries	Sep. 30, 2012 Reportable legal entities Non-Guarantor Subsidiaries	Dec. 31, 2011 Reportable legal entities Non-Guarantor Subsidiaries	Sep. 30, 2013 Eliminations	Dec. 31, 2012 Eliminations
CONDENSED CONSOLIDATING BALANCE SHEET
Interest rate (as a percent)							5.375%	5.375%	5.375%	6.125%	6.125%	6.125%	8.375%	9.25%	9.25%	6.375%	4.875%	3.00%	6.00%		3.00%		5.375%	6.125%	8.375%	9.25%	6.375%
Consolidated total debt	$ 2,475,000,000																					$ 2,380,600,000
Amount of debt guaranteed by parent																				2,338,400,000
Cash	228,994,000		22,865,000		44,625,000	12,967,000																								194,539,000	7,230,000	11,410,000	188,000	16,911,000	199,000	488,000	313,000	17,544,000	15,436,000	32,727,000	12,466,000
Accounts and other receivables	250,054,000		183,896,000																									86,000	152,000	1,733,000	907,000			239,971,000	175,837,000			9,620,000	7,622,000			(1,356,000)	(622,000)
Other current assets	102,634,000		67,330,000																									2,487,000	2,821,000	8,538,000	2,342,000			81,134,000	56,522,000			12,446,000	9,028,000			(1,971,000)	(3,383,000)
Assets held for sale	5,900,000		30,357,000																															5,900,000	30,357,000
Total current assets	587,582,000		304,448,000																									2,573,000	2,973,000	204,810,000	10,479,000			343,916,000	262,915,000			39,610,000	32,086,000			(3,327,000)	(4,005,000)
Property and equipment, net	513,382,000		439,713,000																									5,284,000	6,315,000	11,008,000	8,938,000			380,973,000	321,873,000			123,359,000	113,454,000			(7,242,000)	(10,867,000)
Investment in consolidated subsidiaries																												378,899,000		2,098,135,000	1,636,504,000			2,783,000	1,956,000							(2,479,817,000)	(1,638,460,000)
Restricted cash - long-term	41,257,000		225,000																											38,933,000	2,000			222,000	223,000			2,102,000
Other long-term assets	259,926,000		202,751,000																									80,396,000	84,055,000	474,993,000	375,687,000			78,519,000	60,114,000			118,092,000	112,757,000			(492,074,000)	(429,862,000)
Total other long-term assets	301,183,000		202,976,000																									459,295,000	84,055,000	2,612,061,000	2,012,193,000			81,524,000	62,293,000			120,194,000	112,757,000			(2,971,891,000)	(2,068,322,000)
Goodwill and other intangible assets	2,215,526,000		1,782,560,000																															2,113,626,000	1,706,646,000			176,899,000	153,961,000			(74,999,000)	(78,047,000)
Total assets	3,617,673,000	[1]	2,729,697,000	[1]																								467,152,000	93,343,000	2,827,879,000	2,031,610,000			2,920,039,000	2,353,727,000			460,062,000	412,258,000			(3,057,459,000)	(2,161,241,000)
Accounts payable and accrued liabilities	215,191,000		153,817,000																									200,000	326,000	89,341,000	61,165,000			111,616,000	83,049,000			14,354,000	9,379,000			(320,000)	(102,000)
Current portion of long-term debt	16,622,000		47,622,000																									536,000	483,000	4,665,000	31,113,000			967,000	800,000			10,454,000	15,226,000
Current portion of affiliate long-term debt	2,271,000		1,704,000																									1,254,000	1,102,000					1,017,000	602,000			720,000	433,000			(720,000)	(433,000)
Other current liabilities	106,627,000		102,060,000																									938,000						95,595,000	96,288,000			10,070,000	8,871,000			24,000	(3,099,000)
Liabilities held for sale			2,397,000																																2,397,000
Total current liabilities	340,711,000		307,600,000																									2,928,000	1,911,000	94,006,000	92,278,000			209,195,000	183,136,000			35,598,000	33,909,000			(1,016,000)	(3,634,000)
Long-term debt	2,436,386,000		2,210,866,000																									6,076,000	12,502,000	2,275,837,000	2,088,586,000			35,965,000	36,705,000			118,508,000	73,073,000
Affiliate long-term debt	19,619,000		13,187,000																									5,306,000	6,303,000					14,314,000	6,884,000			283,097,000	267,521,000			(283,098,000)	(267,521,000)
Dividends in excess of investment in consolidated subsidiaries																													178,869,000														(178,869,000)
Other liabilities	404,719,000		298,097,000																									44,321,000	10,708,000	28,381,000	2,509,000			563,579,000	491,845,000			110,021,000	103,007,000			(341,583,000)	(309,972,000)
Total liabilities	3,201,435,000	[1]	2,829,750,000	[1]																								58,631,000	210,293,000	2,398,224,000	2,183,373,000			823,053,000	718,570,000			547,224,000	477,510,000			(625,697,000)	(759,996,000)
Total Sinclair Broadcast Group shareholders' equity (deficit)	408,521,000		(116,950,000)																									408,521,000	(116,950,000)	429,655,000	(151,763,000)			2,096,986,000	1,635,157,000			(94,879,000)	(82,149,000)			(2,431,762,000)	(1,401,245,000)
Noncontrolling interests in consolidated subsidiaries	7,717,000		16,897,000																																			7,717,000	16,897,000
Total liabilities and equity (deficit)	$ 3,617,673,000		$ 2,729,697,000																									$ 467,152,000	$ 93,343,000	$ 2,827,879,000	$ 2,031,610,000			$ 2,920,039,000	$ 2,353,727,000			$ 460,062,000	$ 412,258,000			$ (3,057,459,000)	$ (2,161,241,000)

[1] Our consolidated total assets as of September 30, 2013 and December 31, 2012 include total assets of variable interest entities (VIEs) of $148.9 million and $107.9 million, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of September 30, 2013 and December 31, 2012 include total liabilities of the VIEs of $16.4 million and $7.9 million, respectively, for which the creditors of the VIEs have no recourse to us.

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EARNINGS PER SHARE (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income (Numerator)
Income from continuing operations	$ 30,551	$ 26,477	$ 60,022	$ 85,736
Net (income) loss attributable to noncontrolling interests included in continuing operations	(309)	(107)	(415)	106
Numerator for diluted earnings per common share from continuing operations available to common shareholders	30,242	26,415	59,607	85,977
Income (loss) from discontinued operations, net of taxes	6,100	(125)	11,558	(178)
Numerator for diluted earnings available to common shareholders	36,342	26,290	71,165	85,799
Shares (Denominator)
Weighted average common shares outstanding (in shares)	99,473,000	81,081,000	90,982,000	80,990,000
Dilutive effect of stock settled appreciation rights, restricted stock awards and outstanding stock options (in shares)	766,000	44,000	567,000	23,000
Weighted-average common and common equivalent shares outstanding (in shares)	100,239,000	81,379,000	91,549,000	81,267,000
Additional Disclosures
Antidilutive dilutive securities excluded from calculation of diluted earnings per share (in shares)	0	1,400,000	0	1,500,000
4.875% Notes
Earning Per Share
Interest rate (as a percent)	4.875%		4.875%
Income (Numerator)
Income impact of assumed conversion of debt securities, net of taxes		$ 45		$ 135
Shares (Denominator)
Dilutive effect of debt securities (in shares)		254,000		254,000
3.0% Notes
Earning Per Share
Interest rate (as a percent)	3.00%		3.00%
3.0% Notes | Maximum
Additional Disclosures
Effect of conversion of notes on diluted earnings per share (in dollars per share)	$ 0.01		$ 0.01

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RELATED PERSON TRANSACTIONS (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			12 Months Ended				3 Months Ended			9 Months Ended					3 Months Ended		9 Months Ended								3 Months Ended	9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended				9 Months Ended				3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Entities owned by the controlling shareholders Leased assets or facilities	Sep. 30, 2012 Entities owned by the controlling shareholders Leased assets or facilities	Sep. 30, 2013 Entities owned by the controlling shareholders Leased assets or facilities	Sep. 30, 2012 Entities owned by the controlling shareholders Leased assets or facilities	Dec. 01, 2012 Bay TV	Dec. 31, 2012 Bay TV LMA	Dec. 31, 2011 Bay TV LMA	Dec. 31, 2010 Bay TV LMA	Dec. 31, 2010 Bay TV Leased assets or facilities	Sep. 30, 2013 Cunningham	Mar. 31, 2013 Cunningham	Sep. 30, 2012 Cunningham	Sep. 30, 2013 Cunningham	Sep. 30, 2012 Cunningham	Oct. 02, 2013 Cunningham	Jul. 31, 2013 Cunningham	Nov. 05, 2009 Cunningham	Sep. 30, 2013 Cunningham LMA	Sep. 30, 2012 Cunningham LMA	Sep. 30, 2013 Cunningham LMA item	Sep. 30, 2012 Cunningham LMA	Dec. 31, 2012 Cunningham LMA	Oct. 01, 2012 Cunningham LMA	Jul. 02, 2012 Cunningham LMA	Jan. 02, 2010 Cunningham LMA item	Sep. 30, 2013 Cunningham Minimum LMA	Dec. 31, 2012 Cunningham Maximum	Sep. 30, 2013 Atlantic Automotive Corporation Leased assets or facilities item	Sep. 30, 2013 Atlantic Automotive Corporation Leased assets or facilities item	Sep. 30, 2012 Atlantic Automotive Corporation Leased assets or facilities	Sep. 30, 2013 Atlantic Automotive Corporation Advertising time	Sep. 30, 2012 Atlantic Automotive Corporation Advertising time	Sep. 30, 2013 Atlantic Automotive Corporation Vehicles and related vehicle services	Sep. 30, 2012 Atlantic Automotive Corporation Vehicles and related vehicle services	Sep. 30, 2013 Atlantic Automotive Corporation Vehicles and related vehicle services	Sep. 30, 2012 Atlantic Automotive Corporation Vehicles and related vehicle services	Sep. 30, 2013 Atlantic Automotive Corporation Maximum Advertising time	Sep. 30, 2012 Atlantic Automotive Corporation Maximum Advertising time	Sep. 30, 2013 Thomas & Libowitz Legal services	Sep. 30, 2012 Thomas & Libowitz Legal services	Sep. 30, 2013 Thomas & Libowitz Legal services	Sep. 30, 2012 Thomas & Libowitz Legal services	Jun. 30, 2013 David Smith Leased assets or facilities Real estate ventures in Baltimore, MD item	Jun. 30, 2013 David Smith Leased assets or facilities Real estate ventures in Towson, MD item	Sep. 30, 2013 David Smith Maximum Leased assets or facilities Real estate ventures in Baltimore, MD	Sep. 30, 2012 David Smith Maximum Leased assets or facilities Real estate ventures in Baltimore, MD	Sep. 30, 2013 David Smith Maximum Leased assets or facilities Real estate ventures in Baltimore, MD	Sep. 30, 2012 David Smith Maximum Leased assets or facilities Real estate ventures in Baltimore, MD	Sep. 30, 2013 David Smith Maximum Leased assets or facilities Real estate ventures in Towson, MD	Sep. 30, 2013 David Smith Maximum Leased assets or facilities Real estate ventures in Towson, MD	Sep. 30, 2013 Controlling shareholders Charter Aircraft	Sep. 30, 2012 Controlling shareholders Charter Aircraft	Sep. 30, 2013 Controlling shareholders Charter Aircraft	Sep. 30, 2012 Controlling shareholders Charter Aircraft
Related person transactions
Right to acquire voting and nonvoting stock (as a percent)														100.00%			100.00%
Amount paid					$ 1,300,000	$ 1,200,000	$ 3,800,000	$ 3,400,000		$ 2,900,000	$ 2,200,000	$ 1,700,000										$ 2,300,000	$ 4,000,000	$ 6,800,000	$ 11,900,000												$ 200,000	$ 500,000	$ 1,100,000	$ 1,100,000			$ 300,000	$ 300,000	$ 1,300,000	$ 700,000
Price for which nonvoting stock was purchased															1,700,000
Percentage of the total capital stock held in the related party, none of which have voting rights														4.40%			4.40%
Right to acquire capital stock or assets of individual subsidiaries (as a percent)														100.00%			100.00%
Amount to purchase license assets of KDBC-TV El Paso, Texas																				21,000,000
Number of additional renewal terms																								3
Agreement renewal period																								5 years
Amount obligated to be paid																													29,100,000
Number of quarterly installments																													10
Amount of quarterly installments																													2,750,000
One quarterly installment amount																													1,600,000
Additional payments																											2,750,000	1,200,000
Aggregate purchase price									40,000,000										21,000,000		78,500,000
Aircraft expense																																																							300,000	200,000	600,000	500,000
Amount of purchase price reduction from quarterly installments																															29,100,000
Annual increase in aggregate purchase price (as a percent)														6.00%			6.00%
Percentage of net broadcast revenue used to determine annual LMA fees required to be paid																														3.00%
Amount used to determine annual LMA fees required to be paid																														5,000,000
Remaining purchase price														57,100,000			57,100,000
Operating costs reimbursement (as a percent)														100.00%			100.00%
Monthly payment required to be paid																										50,000
Total revenues	338,644,000	258,714,000	935,416,000	732,162,000										24,500,000		25,500,000	75,700,000	73,500,000
Amount received													500,000																						100,000	100,000					100,000	100,000							100,000	100,000	200,000	100,000	100,000	100,000
Annual rent																																$ 300,000	$ 700,000	$ 0
Number of restaurants owned by a related party																																															3	1
Number of real estate ventures																																1	1														1	1

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COMMITMENTS AND CONTINGENCIES:

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES:

COMMITMENTS AND CONTINGENCIES:

3. COMMITMENTS AND CONTINGENCIES:

Litigation

We are party to lawsuits and claims from time to time in the ordinary course of business.  Actions currently pending are in various preliminary stages and no judgments or decisions have been rendered by hearing boards or courts in connection with such actions.  After reviewing developments to date with legal counsel, our management is of the opinion that the outcome of our pending and threatened matters will not have a material adverse effect on our consolidated balance sheets, consolidated statements of operations or consolidated statements of cash flows.

Various parties have filed petitions to deny our applications or our LMA partners’ applications for the following stations’ license renewals: WXLV-TV, Winston-Salem, North Carolina; WMYV-TV, Greensboro, North Carolina; WLFL-TV, Raleigh / Durham, North Carolina; WRDC-TV, Raleigh / Durham, North Carolina; WLOS-TV, Asheville, North Carolina, WMMP-TV, Charleston, South Carolina; WTAT-TV, Charleston, South Carolina; WMYA-TV, Anderson, South Carolina; WICS-TV Springfield, Illinois; WBFF-TV, Baltimore, Maryland; KGAN-TV, Cedar Rapids, Iowa; WTTE-TV, Columbus, Ohio; WRGT-TV, Dayton, Ohio; WVAH-TV, Charleston / Huntington, West Virginia; WCGV-TV, Milwaukee, Wisconsin; WTTO-TV, Birmingham, AL; KXVO-TV, Omaha, NE (acquired on October 1, 2013); WNAB-TV, Nashville, TN; WPMI-TV, Mobile, AL; WWHO-TV, Chillicothe, OH and WUTB-TV in Baltimore, MD.  The FCC is in the process of considering the renewal applications and we believe the petitions have no merit.

Network Affiliations

On May 14, 2012, the Company and the licensees of stations to which we provide services, representing 20 affiliates of Fox Broadcast Company (FOX), extended the network affiliation agreements with FOX from the existing term of December 31, 2012 to December 31, 2017.  Concurrently, we entered into an assignable option agreement with Fox Television Stations, Inc. (FTS) giving us or our assignee the right to purchase substantially all the assets of the WUTB station (Baltimore, MD) owned by FTS, which had a program service arrangement with MyNetworkTV, for $2.7 million.  In October 2012, we exercised our option and purchased the assets of WUTB effective June 1, 2013.   As part of this transaction, we also granted options to FTS to purchase the assets of television stations we own in up to three out of four designated markets, which options expired unexercised.  In the second quarter of 2012, we paid $25.0 million to FOX pursuant to the agreements and we recorded $50.0 million in other assets and $25.0 million of other accrued liabilities within the consolidated balance sheet, representing the additional obligation due to FOX which was paid in the second quarter of 2013.  The $50.0 million asset is being amortized through the current term of the affiliation agreement ending on December 31, 2017.  Approximately $2.2 million and $6.6 million of amortization expense has been recorded in the consolidated statement of operations for the three and nine months ended September 30, 2013, respectively.  Approximately $2.2 million and $3.3 million of amortization expense has been recorded in the consolidated statement of operations during the three and nine months ended September 30, 2012.  In addition, we are required to pay to FOX programming payments under the terms of the affiliation agreements.  These payments are recorded in station production expenses as incurred.

Pending Acquisitions

In February 2013, we entered into an agreement to purchase the broadcast assets of eighteen television stations owned by Barrington Broadcasting Group, LLC (Barrington) for $370.0 million, less amounts to be paid by third parties, and entered into agreements to operate or provide sales services to another six stations. The twenty-four stations are located in fifteen markets. Also, the Company will sell its station WSYT-TV (FOX) and assign its LMA with WNYS-TV (MNT) in Syracuse, NY to a third party, and sell its station in Peoria IL, WYZZ-TV (FOX) to Cunningham due to FCC conflict ownership rules. The transaction is expected to close in the fourth quarter of 2013 subject to the approval of the FCC, antitrust clearance, and customary closing conditions.  We expect to fund the purchase price through cash on hand or a delayed draw under our bank credit agreement.

In July 2013, we entered into a definitive agreement to purchase the stock of Perpetual Corporation and the equity interest of Charleston Television, LLC, both owned and controlled by the Allbritton family (Allbritton), for an aggregate purchase price of $985.0 million. The Allbritton stations consist of seven ABC Network affiliates and NewsChannel 8, a 24-hour cable/satellite news network covering the Washington D.C. metropolitan area. The transaction is expected to close late in the first quarter of 2014 or early in the second quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions.   We expect to fund the purchase price at closing through additional borrowings under our bank credit facility.  Additionally, to comply with FCC local television ownership rules, we expect to sell the license and certain related assets of existing stations in Birmingham, AL - WABM (MNT) and WTTO (CW), Harrisburg/Lancaster/Lebanon/York, PA - WHP (CBS), and Charleston, SC - WMMP (MNT) and to provide sales and other non-programming support services to each of these stations pursuant to customary shared services and joint sales agreements.

In September 2013, we entered into a definitive agreement to purchase the broadcast assets of eight television stations owned by New Age Media located in three markets, for an aggregate purchase price of $90.0 million. The transaction is expected to close in the first quarter of 2014, subject to approval of the FCC, antitrust clearance, and other customary closing conditions.  We expect to fund the purchase price through cash on hand or a delayed draw under our bank credit agreement. Additionally, Wilkes/Barre/Scranton, PA – WSWB, Tallahassee, FL – WTLH and WTLF and Gainesville, FL – WMBW will be purchased by a third party; we will continue to provide sales and other non-programming support services to each of these stations, pursuant to customary share services and joint sales agreements.

In June 2013, we entered into a definitive agreement to purchase the stock and broadcast assets of four television stations owned by TTBG LLC (TTBG) located in three markets for $115.4 million.  Also, the Company will assign its right to purchase the license related assets of two of the stations to Deerfield due to FCC conflict ownership rules.  The Company will provide sales and other services to these two Deerfield stations.  We completed the acquisition of two of the four stations on September 30, 2013.  We completed the acquisition of the remaining two stations on October 1, 2013. We expect to fund the purchase price through cash on hand.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Details 4) (USD $)			9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Barrington, TTBG, and New Age	Sep. 30, 2013 Leased Towers	Dec. 31, 2012 Leased Towers
Restricted Cash
Purchase price deposited into escrow account			$ 40,600,000
Restricted cash held for removal of equipment	$ 41,257,000	$ 225,000		$ 200,000	$ 200,000

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RELATED PERSON TRANSACTIONS

9 Months Ended

Sep. 30, 2013

RELATED PERSON TRANSACTIONS

RELATED PERSON TRANSACTIONS

6. RELATED PERSON TRANSACTIONS

Transactions with our controlling shareholders. David, Frederick, J. Duncan and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of the Class B Common Stock and some of our Class A Common Stock.  We engaged in the following transactions with them and/or entities in which they have substantial interests.

Leases.  Certain assets used by us and our operating subsidiaries are leased from Cunningham Communications Inc., Keyser Investment Group, Gerstell Development Limited Partnership and Beaver Dam, LLC (entities owned by the controlling shareholders).  Lease payments made to these entities were $1.3 million and $1.2 million for the three months ended September 30, 2013 and 2012 and $3.8 million and $3.4 million for the nine months ended September 30, 2013 and 2012, respectively.

Bay TV.  In January 1999, we entered into an LMA with Bay TV, which owns the television station WTTA-TV in the Tampa / St. Petersburg, Florida market.  Each of our controlling shareholders owns a substantial portion of the equity of Bay TV and collectively they have a controlling interest.  On December 1, 2012, we purchased substantially all of the assets of Bay TV for $40.0 million. Our board of directors obtained a fairness opinion on the purchase price from a third party valuation firm. Concurrent with the acquisition, our LMA with Bay TV was terminated. Payments made to Bay TV were $2.9 million, $2.2 million and $1.7 million for the years ended December 31, 2012, 2011 and 2010, respectively.  We received $0.5 million for the year ended December 31, 2010 from Bay TV for certain equipment leases which expired on November 1, 2010. The LMA with Bay TV has been approved pursuant to the current related person transaction policy.

Charter Aircraft.  From time to time, we charter aircraft owned by certain controlling shareholders.  We incurred $0.3 million and $0.6 million for the three and nine months ended September 30, 2013, respectively.  We incurred $0.2 million and $0.5 million for the three and nine months ended September 30, 2012, respectively.

Cunningham Broadcasting Corporation.  As of September 30, 2013, Cunningham was the owner-operator and FCC licensee of: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WTAT-TV Charleston, South Carolina; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; and WDBB-TV Birmingham, Alabama (collectively, the Cunningham Stations).  In addition to these Cunningham stations, Cunningham purchased the license assets of KDBC-TV, El Paso, TX which is managed by another party under a JSA agreement, in July 2013 for $21.0 million.  On October 1, 2013, we purchased the station from Cunningham for $21.0 million.

During the first quarter of 2013, the estate of Carolyn C. Smith, a parent of our controlling shareholders, distributed all of the non-voting stock owned by the estate to our controlling shareholders, and a portion was repurchased by Cunningham for $1.7 million in the aggregate.  As of September 30, 2013, our controlling shareholders own approximately 4.4% of the total capital stock of Cunningham, none of which have voting rights.  The remaining amount of non-voting stock is owned by trusts established for the benefit of the children of our controlling shareholders.  The estate of Mrs. Smith currently owns all of the voting stock.  The sale of the voting stock by the estate to an unrelated party is pending approval of the FCC.  We have options from the trusts, which grant us the right to acquire, subject to applicable FCC rules and regulations, 100% of the voting and nonvoting stock of Cunningham. We also have options from each of Cunningham’s subsidiaries, which are the FCC licensees of the Cunningham stations, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations, 100% of the capital stock or the assets of Cunningham’s individual subsidiaries.

In addition to the option agreements, we have LMAs with the Cunningham Stations to provide programming, sales and managerial services to the stations.  Each of the LMAs has a current term that expires on July 1, 2016 and there are three additional 5-year renewal terms remaining with final expiration on July 1, 2031.

Effective November 5, 2009, we entered into amendments and/or restatements of the following agreements between Cunningham and us: (i) the LMAs, (ii) option agreements to acquire Cunningham stock and (iii) certain acquisition or merger agreements relating to the Cunningham Stations.

Pursuant to the terms of the LMAs, options and other agreements, beginning on January 1, 2010 and ending on July 1, 2012, we were obligated to pay Cunningham the sum of approximately $29.1 million in 10 quarterly installments of $2.75 million and one quarterly payment of approximately $1.6 million, which amounts were used to pay down Cunningham’s bank credit facility and which amounts were credited toward the purchase price for each Cunningham station.  An additional $1.2 million was paid on July 1, 2012 and another installment of $2.75 million was paid on October 1, 2012 as an additional LMA fee and was used to pay off the remaining balance of Cunningham’s bank credit facility.  The aggregate purchase price of the television stations, which was originally $78.5 million pursuant to certain acquisition or merger agreements subject to 6% annual increases, was decreased by each payment made by us to Cunningham, through 2012, up to $29.1 million in the aggregate, pursuant to the foregoing transactions with Cunningham as such payments are made.  Beginning on January 1, 2013, we are obligated to pay Cunningham an annual LMA fee for the television stations equal to the greater of (i) 3% of each station’s annual net broadcast revenue and (ii) $5.0 million, of which a portion of this fee will be credited toward the purchase price to the extent of the annual 6% increase.  The remaining purchase price as of September 30, 2013 was approximately $57.1 million.

Additionally, we reimbursed Cunningham for 100% of its operating costs, and paid Cunningham a monthly payment of $50,000 through December 2012 as an LMA fee.

We made payments to Cunningham under these LMAs and other agreements of $2.3 million and $4.0 million for the three months ended September 30, 2013 and 2012 respectively, and $6.8 million and $11.9 million for the nine months ended September 30, 2013 and 2012, respectively.  For the three months ended September 30, 2013 and 2012, Cunningham’s stations provided us with approximately $24.5 million and $25.5 million, respectively, and approximately $75.7 million and $73.5 million for the nine months ended September 30, 2013 and 2012, respectively, of total revenue.  The financial statements for Cunningham are included in our consolidated financial statements for all periods presented.  Our Bank Credit Agreement contains certain cross-default provisions with certain material third-party licenses.  As of September 30, 2013, Cunningham was the sole material third-party licensee.  In connection with the October Amendment of our Bank Credit Agreement (see Note 4. Notes Payable and Commercial Bank Financing), certain terms changed resulting in Cunningham no longer being considered a material third party licensee.

Atlantic Automotive.  We sold advertising time to and purchased vehicles and related vehicle services from Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company.  David D. Smith, our President and Chief Executive Officer, has a controlling interest in, and is a member of the Board of Directors of Atlantic Automotive. We received payments for advertising time totaling less than $0.1 million for each of the three months ended September 30, 2013 and 2012. We received payments for advertising time totaling $0.1 million and $0.1for the nine months ended September 30, 2013 and 2012, respectively. We paid $0.2 million and $1.1 million for vehicles and related vehicle services from Atlantic Automotive for the three and nine months ended September 30, 2013, respectively, and paid $0.5 million and $1.1 million for the three and nine months ended September 30, 2012. Additionally, in August 2011, Atlantic Automotive entered into an office lease agreement with Towson City Center, LLC (Towson City Center), a subsidiary of one of our real estate ventures, and began occupying the space in June 2012.  Atlantic Automotive paid $0.3 million and $0.7 million in rent during the three and nine months ended September 30, 2013, respectively. Atlantic Automotive made no rent payments during the nine months ended June 30, 2012.

Leased property by real estate ventures. Certain of our real estate ventures have entered into leases with entities owned by David Smith to lease restaurant space. There are leases for three restaurants in a building owned by one of our consolidated real estate ventures in Baltimore, MD.  Total rent received under these leases was less than $0.1 million for each of the three months ended September 30, 2013 and 2012. Total rent received under these leases was less than $0.2 million and less than $0.1 million for the nine months ended September 30, 2013 and 2012, respectively. There is also one lease for a restaurant in a building owned by one of our real estate ventures, accounted for under the equity method, in Towson, MD. We received under this lease less than $0.1 million for the three and nine months ending September 30, 2013.

Thomas & Libowitz P.A.  A. Thomas, a partner and founder of Thomas & Libowitz, P.A. (Thomas & Libowitz), a law firm providing legal services to us on an ongoing basis, is the son of a former member of the Board of Directors, Basil A. Thomas.  We paid fees of $0.3 million to Thomas & Libowitz for each of the three months ended September 30, 2013 and 2012.  For the nine months ended September 30, 2013 and 2012, we paid fees of $1.3 million and $0.7 million, respectively, to Thomas & Libowitz.

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ACQUISITIONS

9 Months Ended

Sep. 30, 2013

ACQUISITIONS

ACQUISITIONS

2. ACQUISITIONS

Four Points

Effective January 1, 2012, we completed the acquisition of the broadcast assets of Four Points, which we had previously operated pursuant to a LMA since October 1, 2011.  The acquired assets consist of the following seven stations in four markets along with the respective network affiliation or program service arrangements: KUTV (CBS) and KMYU (MNT / This TV) in Salt Lake City / St. George, UT; KEYE (CBS) in Austin, TX; WTVX (CW), WTCN (MNT) and WWHB (Azteca) in West Palm Beach / Fort Pierce / Stuart, FL; and WLWC (CW) in Providence, RI / New Bedford, MA.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Four Points $200.0 million in cash, less a working capital adjustment of $0.9 million.  The acquisition was financed with a $180.0 million draw under an incremental Term B Loan commitment under our amended Bank Credit Agreement plus a $20.0 million cash escrow previously paid in September 2011.

The results of the acquired operations are included in the financial statements of the Company beginning January 1, 2012.  Under the acquisition method of accounting, the purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	456
Program contract costs	3,731
Property and equipment	34,578
Broadcast licenses	10,658
Definite-lived intangible assets	93,800
Other assets	548
Accrued liabilities	(381		)
Program contracts payable	(5,157		)
Fair value of identifiable net assets acquired	138,233
Goodwill	60,843
Total	$	199,076

The final allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $66.9 million, the decaying advertiser base of $9.8 million, and other intangible assets of $17.1 million. These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average of 14 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  Certain measurement period adjustments have been made since the initial allocation in the first quarter of 2012, which were not material to the consolidated financial statements.

Prior to the acquisition, since October 1, 2011, we provided sales, programming and management services to the stations pursuant to an LMA.  During that period, we funded the working capital needs of the stations, which totaled $8.1 million as of December 31, 2011 and was reflected as cash flows used in operating activities within the consolidated statement of cash flows for that period.  This working capital is not reflected in the purchase price allocation presented above.

The results of operations for the three and nine months ended September 30, 2012 include the results of the Four Points stations since January 1, 2012.  Net broadcast revenues and operating income of the Four Points stations included in our consolidated statements of operations, were $17.9 million and $4.4 million for the three months ended September 30, 2013, respectively, and $54.3 million and $14.0 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income of the Four Points stations included in our consolidated statements of operations, were $18.7 million and $4.1 million for the three months ended September 30, 2012, respectively, and $52.9 million and $11.6 million for the nine months ended September 30, 2012, respectively.  These amounts exclude the operations of WLWC-TV, which was sold effective April 1, 2013 and are classified as discontinued operations in the consolidated statements of operations.  See Note 1. Nature of Operations and Summary of Significant Accounting Policies.  Net broadcast revenues and operating income (loss) of WLWC-TV were $1.4 million and $0.2 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income (loss) of WLWC-TV were $1.4 million and $(0.2) million, respectively, for the three months ended September 30, 2012 and $4.1 million and $0.1 million for the nine months ended September 30, 2012, respectively.

Freedom

Effective April 1, 2012, we completed the acquisition of the broadcast assets of Freedom, which we had previously operated pursuant to a LMA since December 1, 2011. The acquired assets consist of the following eight stations in seven markets along with the respective network affiliation or program service arrangements: WPEC (CBS) in West Palm Beach, FL; WWMT (CBS) in Grand Rapids/Kalamazoo/Battle Creek, MI;  WRGB (CBS) and WCWN (CW) in Albany, NY; WTVC (ABC) in Chattanooga, TN; WLAJ (ABC) in Lansing, MI; KTVL (CBS) in Medford-Klamath Falls, OR; and KFDM (CBS) in Beaumont/Port Arthur/Orange, TX.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Freedom $385.0 million plus a working capital adjustment of $0.3 million.  The acquisition was financed with a draw under a $157.5 million incremental Term Loan A and a $192.5 million incremental Term B Loan commitment under our amended Bank Credit Agreement, plus a $38.5 million cash escrow previously paid in November 2011.

The results of the acquired operations are included in the financial statements of the Company beginning April 1, 2012.  Under the acquisition method of accounting, the purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	373
Program contract costs	3,520
Property and equipment	54,109
Broadcast licenses	10,424
Definite-lived intangible assets	140,963
Other assets	278
Accrued liabilities	(589		)
Program contracts payable	(3,404		)
Fair value of identifiable net assets acquired	205,674
Goodwill	179,609
Total	$	385,283

The final allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $93.1 million, the decaying advertiser base of $25.1 million, and other intangible assets of $22.8 million.  These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average life of 16 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  Certain measurement period adjustments have been made since the initial allocation in the second quarter of 2012, which were not material to the consolidated financial statements.

Prior to the acquisition, since December 1, 2011, we provided sales, programming and management services to the stations pursuant to an LMA.  During that period, we funded the working capital needs of the stations, which totaled $1.5 million as of December 31, 2011 and $9.6 million as of April 1, 2012, the date of acquisition, and was reflected as cash flows used in operating activities within the consolidated statement of cash flows for those periods.  This working capital is not reflected in the purchase price allocation presented above.

The results of operations for the nine months ended September 30, 2012 includes the results of the Freedom stations since April 1, 2012.  Net broadcast revenues and operating income of the Freedom stations included in our consolidated statements of operations, were $26.2 million and $6.7 million for the three months ended September 30, 2013, respectively, and $79.9 million and $20.8 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating income of the Freedom stations included in our consolidated statements of operations, were $26.8 million and $5.0 million for the three months ended September 30, 2012, respectively, and $52.5 million and $14.0 million for the nine months ended September 30, 2012, respectively.  These amounts exclude the operations of WLAJ-TV, which was sold effective, January 1, 2013 and are classified as discontinued operations in the consolidated statements of operations.  See Note 1. Nature of Operations and Summary of Significant Accounting Policies.  Net broadcast revenues and operating income of WLAJ-TV were $0.7 million and $0.1 million for the nine months ended September 30, 2013, respectively.  Net broadcast revenues and operating loss of WLAJ-TV were $1.1 million and $0.2 million, respectively, for the three months ended September 30, 2012 and $2.1 million and zero for the nine months ended September 30, 2012, respectively.  Additionally, during the first quarter 2012, prior to the acquisition, we recorded net broadcast revenues of $10.0 million related to the Freedom LMAs.

Newport

Effective December 1, 2012, we completed the acquisition of certain broadcast assets of Newport Television (Newport). The acquired assets relate to the following seven stations in six markets along with the respective network affiliation or program service arrangements: WKRC (CBS) in Cincinnati, OH; WOAI (NBC) in San Antonio, TX; WHP (CBS) in Harrisburg/Lancaster/Lebanon/York, PA; WPMI (NBC) and WJTC (IND) in Mobile, AL/Pensacola, FL; KSAS (FOX) in Wichita/Hutchinson, KS; and WHAM (ABC) in Rochester, NY.  We also acquired Newport’s rights under the local marketing agreements with WLYH (CW) in Harrisburg, PA and KMTW (MNT) in Wichita, KS, as well as options to acquire the license assets.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

We paid Newport $460.5 million in cash, less a working capital adjustment of $1.3 million.  We financed the $460.5 million purchase price, less the $41.3 million in escrow with the net proceeds from the 6.125% Notes issued in October 2012.

Our right to acquire certain of the license assets of WPMI and WJTC in Mobile, AL was assigned to Deerfield and Deerfield acquired these assets effective December 1, 2012 for $6.0 million. Additionally, Deerfield acquired the license assets of WHAM in Rochester, NY effective February 1, 2013 for $6.0 million, using borrowings under its bank credit facility. Prior to Deerfield’s acquisition of the assets of WHAM, the assets were owned by Newport.  Concurrent with the acquisition of WKRC in Cincinnati, OH and WOAI in San Antonio, TX from Newport, we sold to Deerfield the license assets of two of our existing stations located in Cincinnati, OH (WSTR MNT) and San Antonio, TX (KMYS CW) for a total of $10.7 million. Deerfield financed these purchases with third party bank financing which we have guaranteed. We have assignable purchase option agreements with Deerfield to acquire the license assets upon FCC approval and operate the stations pursuant to shared services and joint sales agreements with Deerfield. We consolidate the license assets owned by Deerfield because the licensee companies are VIEs and we are the primary beneficiary. Prior to Deerfield acquiring the license assets of WHAM in Rochester, NY on February 1, 2013, we operated the station pursuant to a shared services and joint sales agreement with Newport. We consolidated the license assets owned by Newport from December 1, 2012 to January 31, 2013 because the licensee company was a VIE and the Company is the primary beneficiary. See Variable Interest Entities in Note 1.  Nature of Operations and Summary of Significant Accounting Policies.  The purchase of the license assets by Deerfield in February 2013 was accounted for as a transaction between parties under common control.

Under the acquisition method of accounting, the results of the acquired operations are included in the financial statements of the Company beginning December 1, 2012. The initial purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values. The initial purchase price allocated includes $460.5 million paid for certain broadcast assets of the seven stations from Newport and the rights under the LMAs with the two other stations, $6.0 million paid by Deerfield for the license assets of WPMI and WJTC and $6.0 million paid by Deerfield for the license assets of WHAM, and $0.2 million of noncontrolling interests related to the WLYH VIE, less a working capital adjustment of $1.3 million. The sale of the license assets of WSTR in Cincinnati, OH and KMYS in San Antonio, TX was considered a transaction between parties under common control and therefore was not included in the purchase price allocation. The purchase price allocation is preliminary pending a final determination of the fair values of the assets and liabilities. The initial allocated fair value of acquired assets and assumed liabilities, including the assets owned by VIEs, is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	1,390
Program contract costs	10,378
Property and equipment	53,883
Broadcast licenses	15,581
Definite-lived intangible assets	240,013
Other assets	1,097
Accrued liabilities	(3,928		)
Program contracts payable	(11,634		)
Fair value of identifiable net assets acquired	306,780
Goodwill	164,621
Total	$	471,401

The preliminary allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $176.0 million, the decaying advertiser base of $23.7 million, and other intangible assets of $40.3 million. These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average of 14 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill will be deductible for tax purposes.  The preliminary purchase price allocation is based upon all information available to us at the present time and is subject to change, and such changes could be material.  Certain measurement period adjustments have been made since the initial allocation in the fourth quarter of 2012, which were not material to our consolidated financial statements.

Net broadcast revenues and operating income of the Newport stations included in our consolidated statements of operations, were $36.1 million and $5.5 million for the three months ended September 30, 2013, respectively, and $109.3 million and $25.3 million for the nine months ended September 30, 2013, respectively.

Fisher Communications

Effective August 8, 2013, we completed the acquisition of all of the outstanding common stock of Fisher Communications, Inc. (Fisher). We paid $373.2 million to the shareholders of the Fisher common stock, representing $41.0 per common share. We financed the total purchase price with cash on hand. Fisher owns certain broadcast assets related to the following twenty-two stations, and four radio stations in 8 markets along with the respective network affiliation or program service arrangements: KOMO (ABC) and KUNS (Univision) in Seattle-Tacoma, WA; KATU (ABC), KUNP(Univision), and KUNP-LP (Univision) in Portland, OR; KLEW (CBS) in Spokane, WA; KBOI (CBS) and KYUU-LD (CW) in Boise, ID; KVAL (CBS), KCBY (CBS), KPIC (CBS), KMTR (NBC), KMCB (NBC), and KTCW (NBC) in Eugene, OR; KIMA (CBS), KEPR (CBS), KUNW-CD (Univision), and KVVK-CD (Univision), in Yakima/Pasco/Richland/Kennewick, WA; KBAK (CBS) and KBFX-CD (FOX) in Bakersfield, CA; as well as KIDK (CBS/FOX) and KXPI (FOX) in Idaho Falls/Pocatello, ID. The four radio stations acquired are: KOMO (AM/FM), KPLZ (FM) and KVI (AM) in the Seattle/Tacoma, WA market.  This acquisition provides expansion into additional markets and increases value based on the synergies we can achieve.

The results of the acquired operations are included in the financial statements of the Company beginning on August 8, 2013.  Under the acquisition method of accounting, the initial purchase price has been allocated to the acquired assets and assumed liabilities based on estimated fair values.  The allocation reflects the consolidation of net assets of the third party which owns the license and related assets of KMTR in Eugene, OR, which we have consolidated, as the licensee is considered to be a VIE and we are the primary beneficiary of the variable interests. Additionally, another third party that performs certain services pursuant to outsourcing agreement to our stations in Idaho Falls, ID  (KIDK and KXPI), has exercised an existing purchase option to purchase the broadcast assets of the two stations for $5.9 million.  These assets have been classified as assets held for sale in the initial purchase price allocation and in our consolidated balance sheet as of September 30, 2013.  Also included in the liabilities assumed are obligations under a noncontributory supplemental retirement program that covers former members of management of Fisher.  The program was frozen in 2005 and does not include any active employees.  The estimated projected benefit obligation at the acquisition date was $23.5 million, based on an estimated discount rate of 3.6%.  Fisher had funded the obligation with annuity contracts and life insurance policies, which Fisher was the owner and beneficiary.  Included in the assets acquired are the estimated fair value based on the cash value of the annuity contracts and cash surrender value of the life insurance policies, totaling $17.9 million.  The purchase price allocation is preliminary pending a final determination of the fair values of the assets and liabilities. The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Cash	$	13,531
Accounts Receivable	29,962
Prepaid expenses and other current assets	2,079
Program contract costs	10,954
Property and equipment	48,616
Broadcast licenses	11,058
Definite-lived intangible assets	156,332
Other assets	24,632
Assets Held for Sale	5,900
Accounts payable and accrued liabilities	(20,342		)
Program contracts payable	(10,954		)
Deferred Tax Liability	(50,416		)
Other long-term liabilities	(25,482		)
Fair value of identifiable net assets acquired	195,870
Goodwill	177,326
Total	$	373,196

The preliminary allocation presented above is based upon management’s estimate of the fair values using valuation techniques including income, cost and market approaches.  In estimating the fair value of the acquired assets and assumed liabilities, the fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.  The amount allocated to definite-lived intangible assets represents the estimated fair values of network affiliations of $100.6 million, the decaying advertiser base of $15.0 million, and other intangible assets of $40.8 million.  These intangible assets will be amortized over the estimated remaining useful lives of 15 years for network affiliations, 10 years for the decaying advertiser base and a weighted average life of 15 years for the other intangible assets.  Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.  Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies.  We expect that goodwill deductible for tax purposes will be approximately $19.5 million.

The results of operations for the three and nine months ended September 30, 2013 includes the results of the Fisher stations since August 8, 2013.  Net broadcast revenues and operating income of the Fisher stations included in our consolidated statements of operations, were $25.9 million and $8.2 million for the three and nine months ended September 30, 2013.  Post-acquisition, we recognized $4.3 million of severance expense related to certain Fisher executives and employees that have been or will be terminated who had existing agreements in place prior to close.

Pro Forma Information

The following table sets forth unaudited pro forma results of continuing operations for the three and nine months ended September 30, 2012, assuming that the acquisitions of the Freedom, Newport, and Fisher stations discussed above, along with transactions necessary to finance the acquisitions, occurred at the beginning of the annual period presented (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Total revenues	$	354,545	$	335,849	$	1,030,175	$	972,305
Net Income	$	28,380	$	29,877	$	57,487	$	84,146
Net Income attributable to Sinclair Broadcast Group	$	28,071	$	29,733	$	57,072	$	84,139
Basic and diluted earnings per share attributable to Sinclair Broadcast Group	$	0.28	$	0.37	$	0.70	$	1.04

The results of operations of the Four Points stations were included in our consolidated statements of operations for the three and nine months ended September 30, 2013 and 2012.  The results of operations, of all of the aforementioned acquired stations, were included in our consolidated statement of operations for the three and nine months ended September 30, 2013.

This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not necessarily indicative of what our results would have been had we operated the businesses since the beginning of the annual period presented.  The pro forma adjustments reflect depreciation expense, amortization of intangibles and amortization of program contract costs related to the fair value adjustments of the assets acquired, additional interest expense related to the financing of the transactions, exclusion of nonrecurring financing and transaction related costs, alignment of accounting policies and the related tax effects of the adjustments.  The pro forma revenues exclude the revenues of WLAJ-TV, which are classified as discontinued operations in the consolidated statements of operations.  Total revenues of WLAJ-TV, which are excluded from the pro forma results above for the nine months ended September 30, 2013 were $1.0 million.

Other Acquisitions

We acquired five other television stations during the year ended December 31, 2012 in three markets. The initial purchase price allocated includes $45.1 million paid for certain broadcast assets of these stations, less working capital adjustments of $0.7 million, and $4.4 million of non-controlling interests related to, and amounts paid by certain VIEs for the license assets of certain of these stations owned by VIEs that we consolidate. In addition to the Fisher acquisition, we acquired eight television stations during the first nine months of 2013 in six markets, which four of the six markets were acquired from Cox Media Group in May 2013. Additionally, two of the eight stations were acquired in one market from TTBG LLC (TTBG) on September 30, 2013. The initial purchase price allocated includes $136.9 million paid for certain broadcast assets of these stations, less working capital adjustments of $4.4 million, plus $3.1 million paid by Deerfield for the license assets of certain of these stations owned by VIEs that we consolidate. We allocated the total purchase price of these within the respective years, as follows (in thousands):

	2013			2012
Prepaid expenses and other current assets	$	1,991		$	160
Program contract costs	7,594			1,638
Property and equipment	35,439			16,545
Broadcast licenses	1,611			2,679
Definite-lived intangible assets	48,049			22,546
Accrued liabilities	(2,086		)	(1,178		)
Program contracts payable	(7,625		)	(4,252		)
Fair value of identifiable net assets acquired	84,973			38,138
Goodwill	50,674			10,661
Total	$	135,647		$	48,799

In December 2012, we acquired the license assets of WTTA-TV in Tampa/St. Petersburg, Florida from Bay Television, Inc. (Bay TV). Prior to December 1, 2012, we performed sales, programming and other management services to the station pursuant to an LMA which was terminated upon closing. As discussed in Note 6. Related Person Transactions, our controlling shareholders own a controlling interest in Bay TV. As this was considered a transaction between entities under common control, the acquisition method of accounting was not applied, and the assets acquired were recorded at their historical cost basis and the difference between the purchase price and the historical cost basis of the assets of $23.6 million, net of taxes of $15.6 million, was recorded as a reduction in additional paid-in capital. A substantial portion of the purchase price will be deductible for tax purposes in future periods. Net broadcast revenues and operating income of these stations, included in our consolidated statements of operations were $29.5 million and $6.7 million for the three months ended September 30, 2013, respectively, and $47.0 million and $10.5 million for the nine months ended September 30, 2013, respectively.

In conjunction with all acquisitions in 2012 and 2013, we incurred transaction costs of approximately $3.5 million, which are reported in general and administrative expenses in the accompanying consolidated statements of operations, as incurred.  For the three and nine months ended September 30, 2013, such costs totaled $0.1 million and $1.0 million, respectively.  For the three and nine months ended September 30, 2012, there were $0.4 and $0.9 million, respectively.  These costs were not included in the pro forma amounts above as they are nonrecurring in nature.

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CONSOLIDATED STATEMENT OF EQUITY (DEFICIT) (USD $) In Thousands, except Share data, unless otherwise specified	Total USD ($)	Additional Paid-In Capital USD ($)	Accumulated Deficit USD ($)	Accumulated Other Comprehensive Loss USD ($)	Noncontrolling Interests USD ($)	Class A Common Stock	Class A Common Stock Common Stock USD ($)	Class B Common Stock	Class B Common Stock Common Stock USD ($)
BALANCE at Dec. 31, 2011	$ (111,362)	$ 617,375	$ (734,511)	$ (4,848)	$ 9,813		$ 520		$ 289
BALANCE (in shares) at Dec. 31, 2011							52,022,086		28,933,859
Increase (Decrease) in Stockholders' Equity
Dividends declared on Class A and Class B Common Stock	(31,245)		(31,245)
Class A Common Stock issued pursuant to employee benefit plans	4,554	4,551					3
Class A Common Stock issued pursuant to employee benefit plans (in shares)							284,722
Tax benefit on share based awards	207	207
Distributions to noncontrolling interests	(734)				(734)
Issuance of subsidiary share awards	392				392
Amortization of net periodic pension benefit costs, net of taxes	246			246
Net income	85,558		85,664		(106)
BALANCE at Sep. 30, 2012	(52,384)	622,133	(680,092)	(4,602)	9,365		523		289
BALANCE (in shares) at Sep. 30, 2012							52,306,808		28,933,859
BALANCE at Dec. 31, 2012	(100,053)	600,928	(713,697)	(4,993)	16,897		523		289
BALANCE (in shares) at Dec. 31, 2012						52,332,012	52,332,012	28,933,859	28,933,859
Increase (Decrease) in Stockholders' Equity
Dividends declared on Class A and Class B Common Stock	(41,938)		(41,938)
Issuance of common stock, net of issuance costs	472,400	472,220					180
Issuance of common stock, net of issuance costs (in shares)							18,000,000
Class B Common Stock converted into Class A Common Stock							27		(27)
Class B Common Stock converted into Class A Common Stock (in shares)							2,671,649		(2,671,649)
4.875% Convertible Debentures converted into Class A Common Stock, net of taxes	7,313	7,310					3
4.875% Convertible Debentures converted into Class A Common Stock, net of taxes (in shares)							338,632
Class A Common Stock issued pursuant to employee benefit plans	9,479	9,129			344		6
Class A Common Stock issued pursuant to employee benefit plans (in shares)							558,149
Tax benefit on share based awards	503	503
Distributions to noncontrolling interests	(9,939)				(9,939)
Class A Common Stock sold by variable interest entity, net of taxes	7,008	7,008
Amortization of net periodic pension benefit costs, net of taxes	(116)			(116)
Net income	71,580		71,165		415
BALANCE at Sep. 30, 2013	$ 416,238	$ 1,097,098	$ (684,470)	$ (5,109)	$ 7,717		$ 739		$ 263
BALANCE (in shares) at Sep. 30, 2013						73,900,442	73,900,442	26,262,210	26,262,210

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COMMITMENTS AND CONTINGENCIES: (Details) (USD $)	3 Months Ended		9 Months Ended			0 Months Ended	9 Months Ended		1 Months Ended	3 Months Ended			9 Months Ended			1 Months Ended		1 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Aug. 08, 2013 Fisher item	Sep. 30, 2013 TTBG item	Oct. 02, 2013 TTBG item	Sep. 30, 2013 New Age Media item	Sep. 30, 2013 Network affiliation agreements FOX	Sep. 30, 2012 Network affiliation agreements FOX	Jun. 30, 2012 Network affiliation agreements FOX	Sep. 30, 2013 Network affiliation agreements FOX	Sep. 30, 2012 Network affiliation agreements FOX	May 14, 2012 Network affiliation agreements FOX item	May 31, 2012 Option agreement FTS item	May 14, 2012 Option agreement FTS WUTB (MNT) station in Baltimore	May 31, 2012 Option agreement FTS Maximum item	Feb. 28, 2013 Pending acquisition agreement Barrington Broadcasting Group, LLC item	Jun. 30, 2013 Pending acquisition agreement TTBG item	Jul. 31, 2013 Pending acquisition agreement Perpetual Corporation and Charleston Television, LLC Scenario forecast item	Jun. 30, 2013 Pending acquisition agreement Deerfield TTBG item
COMMITMENTS AND CONTINGENCIES
Number of affiliates															20						7
Purchase price pursuant to option																	$ 2,700,000
Option to purchase stations, number of markets																		3
Number of designated markets																4
Number of markets						8	1		3										15	3
Amount paid pursuant to the agreements												25,000,000
Other assets	229,677,000		229,677,000		189,984,000							50,000,000
Other accrued liabilities												25,000,000
Amortization of definite-lived intangible assets and other assets	17,168,000	10,562,000	48,727,000	26,375,000						2,200,000	2,200,000		6,600,000	3,300,000
Purchase price									$ 90,000,000										$ 370,000,000	$ 115,400,000	$ 985,000,000
Number of television stations owned						22	2	2	8										18	4
Number of stations to which sales services were provided																			6
Number of stations located in specified markets																			24
Number of stations to which purchasing rights will be assigned																						2
Number of stations to which sales and other services will be provided																						2

XML

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

9 Months Ended

Sep. 30, 2013

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

9. 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 5.375% Notes, the 6.125% Notes, the 8.375% Notes, the 9.25% Notes, and 6.375% Notes (issued October 2013). Our Class A Common Stock, Class B Common Stock, and the 3.0% Notes, as of September 30, 2013, were obligations or securities of SBG and not obligations or securities of STG.  SBG is a guarantor under the Bank Credit Agreement, the 5.375% Notes, the 6.125% Notes, the 9.25% Notes, the 8.375% Notes, and 6.375% Notes (issued in October 2013).  As of September 30, 2013, our consolidated total debt of $2,475 million included $2,380.6 million of debt related to STG and its subsidiaries of which SBG guaranteed $2,338.4 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 consolidating balance sheets, consolidating statements of operations and comprehensive income and consolidating 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, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—	$	194,539	$	16,911	$	17,544		$	—		$	228,994
Accounts and other receivables	86		1,733		239,971		9,620			(1,356		)	250,054
Other current assets	2,487		8,538		81,134		12,446			(1,971		)	102,634
Assets held for sale	—		—		5,900		—			—			5,900
Total current assets	2,573		204,810		343,916		39,610			(3,327		)	587,582
Property and equipment, net	5,284		11,008		380,973		123,359			(7,242		)	513,382
Investment in consolidated subsidiaries	378,899		2,098,135		2,783		—			(2,479,817		)	—
Restricted cash — long-term	—		38,933		222		2,102			—			41,257
Other long-term assets	80,396		474,993		78,519		118,092			(492,074		)	259,926
Total other long-term assets	459,295		2,612,061		81,524		120,194			(2,971,891		)	301,183
Goodwill and other intangible assets	—		—		2,113,626		176,899			(74,999		)	2,215,526
Total assets	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	(3,057,459	)	$	3,617,673
Accounts payable and accrued liabilities	$	200	$	89,341	$	111,616	$	14,354		$	(320	)	$	215,191
Current portion of long-term debt	536		4,665		967		10,454			—			16,622
Current portion of affiliate long-term debt	1,254		—		1,017		720			(720		)	2,271
Other current liabilities	938		—		95,595		10,070			24			106,627
Total current liabilities	2,928		94,006		209,195		35,598			(1,016		)	340,711
Long-term debt	6,076		2,275,837		35,965		118,508			—			2,436,386
Affiliate long-term debt	5,306		—		14,314		283,097			(283,098		)	19,619
Other liabilities	44,321		28,381		563,579		110,021			(341,583		)	404,719
Total liabilities	58,631		2,398,224		823,053		547,224			(625,697		)	3,201,435
Total Sinclair Broadcast Group equity (deficit)	408,521		429,655		2,096,986		(94,879		)	(2,431,762		)	408,521
Noncontrolling interests in consolidated subsidiaries	—		—		—		7,717			—			7,717
Total liabilities and equity (deficit)	$	467,152	$	2,827,879	$	2,920,039	$	460,062		$	3,057,459		$	3,617,673

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(in thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	7,230		$	199	$	15,436		$	—		$	22,865
Accounts and other receivables	152			907			175,837		7,622			(622		)	183,896
Other current assets	2,821			2,342			56,522		9,028			(3,383		)	67,330
Assets held for sale	—			—			30,357		—			—			30,357
Total current assets	2,973			10,479			262,915		32,086			(4,005		)	304,448
Property and equipment, net	6,315			8,938			321,873		113,454			(10,867		)	439,713
Investment in consolidated subsidiaries	—			1,636,504			1,956		—			(1,638,460		)	—
Restricted cash — long term	—			2			223		—			—			225
Other long-term assets	84,055			375,687			60,114		112,757			(429,862		)	202,751
Total other long-term assets	84,055			2,012,193			62,293		112,757			(2,068,322		)	202,976
Goodwill and other intangible assets	—			—			1,706,646		153,961			(78,047		)	1,782,560
Total assets	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697
Accounts payable and accrued liabilities	$	326		$	61,165		$	83,049	$	9,379		$	(102	)	$	153,817
Current portion of long-term debt	483			31,113			800		15,226			—			47,622
Current portion of affiliate long-term debt	1,102			—			602		433			(433		)	1,704
Other current liabilities	—			—			96,288		8,871			(3,099		)	102,060
Liabilities held for sale	—			—			2,397		—			—			2,397
Total current liabilities	1,911			92,278			183,136		33,909			(3,634		)	307,600
Long-term debt	12,502			2,088,586			36,705		73,073			—			2,210,866
Affiliate long-term debt	6,303			—			6,884		267,521			(267,521		)	13,187
Dividends in excess of investment in consolidated subsidiaries	178,869			—			—		—			(178,869		)	—
Other liabilities	10,708			2,509			491,845		103,007			(309,972		)	298,097
Total liabilities	210,293			2,183,373			718,570		477,510			(759,996		)	2,829,750
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(116,950		)	(151,763		)	1,635,157		(82,149		)	(1,401,245		)	(116,950		)
Noncontrolling interests in consolidated subsidiaries	—			—			—		16,897			—			16,897
Total liabilities and equity (deficit)	$	93,343		$	2,031,610		$	2,353,727	$	412,258		$	(2,161,241	)	$	2,729,697

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	319,767		$	32,970		$	(14,093	)	$	338,644
Program and production	—			112			99,186			13,870			(14,229		)	98,939
Selling, general and administrative	901			14,712			64,300			2,386			(75		)	82,224
Depreciation, amortization and other operating expenses	348			629			68,820			19,143			(4,307		)	84,633
Total operating expenses	1,249			15,453			232,306			35,399			(18,611		)	265,796
Operating (loss) income	(1,249		)	(15,453		)	87,461			(2,429)			4,518			72,848
Equity in earnings of consolidated subsidiaries	40,547			55,128			60			—			(95,735		)	—
Interest expense	(203		)	(37,123		)	(1,269		)	(6,538		)	5,266			(39,867		)
Other income (expense)	996			6,772			(6,710		)	1,085			(84		)	2,059
Total other income (expense)	41,340			24,777			(7,919		)	(5,453		)	(90,553		)	(37,808		)
Income tax benefit (provision)	(3,749		)	16,667			(22,236		)	929			3,900			(4,489		)
Income from discontinued operations	—			6,108			(8		)	—			—			6,100
Net income (loss)	36,342			32,099			57,298			(6,953		)	(82,135		)	36,651
Net income attributable to the noncontrolling interests	—			—			—			(309		)	—			(309		)
Net income (loss) attributable to Sinclair Broadcast Group	$	36,342		$	32,099		$	57,298		$	(7,262	)	$	(82,135	)	$	36,342
Comprehensive income (loss)	$	36,613		$	32,061		$	57,298		$	(7,262	)	$	(82,097	)	$	36,613

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	246,531		$	14,364		$	(2,181	)	$	258,714
Program and production	—			278			63,777			(1		)	(2,349		)	61,705
Selling, general and administrative	746			13,157			36,720			908			(76		)	51,455
Depreciation, amortization and other operating expenses	382			618			53,819			12,508			(171		)	67,156
Total operating expenses	1,128			14,053			154,316			13,415			(2,596		)	180,316
Operating (loss) income	(1,128		)	(14,053		)	92,215			949			415			78,398
Equity in earnings of consolidated subsidiaries	26,435			50,171			—			—			(76,606		)	—
Interest expense	(341		)	(32,560		)	(1,291		)	(6,352		)	5,250			(35,294		)
Other income (expense)	869			43			40			1,597			(83		)	2,466
Total other income (expense)	26,963			17,654			(1,251		)	(4,755		)	(71,439		)	(32,828		)
Income tax benefit (provision)	326			19,872			(39,396		)	105			—			(19,093		)
(Loss) income from discontinued operations	84			(68		)	(141		)	—			—			(125		)
Net income (loss)	26,245			23,405			51,427			(3,701		)	(71,024		)	26,352
Net income attributable to the noncontrolling interests	—			—			—			(107		)	—			(107		)
Net income (loss) attributable to Sinclair Broadcast Group	$	26,245		$	23,405		$	51,427		$	(3,808	)	$	(71,024	)	$	26,245
Comprehensive income (loss)	$	26,409		$	23,462		$	51,427		$	(3,808	)	$	(71,081	)	$	26,409

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	887,489		$	90,402		$	(42,475	)	$	935,416
Program and production	—			207			269,360			28,489			(32,990		)	265,066
Selling, general and administrative	2,679			34,840			167,654			14,627			(9,644		)	210,156
Depreciation, amortization and other operating expenses	1,038			1,558			186,926			50,691			(803		)	239,410
Total operating expenses	3,717			36,605			623,940			93,807			(43,437		)	714,632
Operating (loss) income	(3,717		)	(36,605		)	263,549			(3,405		)	962			220,784
Equity in earnings of consolidated subsidiaries	76,623			164,370			—			—			(240,993		)	—
Interest expense	(903		)	(115,115		)	(3,607		)	(19,027		)	15,623			(123,029		)
Other income (expense)	3,029			3,141			(19,433		)	4,990			(6,468		)	(14,741		)
Total other income (expense)	78,749			52,396			(23,040		)	(14,037		)	(231,838		)	(137,770		)
Income tax (provision) benefit	(3,867		)	47,645			(73,267		)	2,597			3,900			(22,992		)
Income from discontinued operations	—			11,063			495			—			—			11,558
Net income (loss)	71,165			74,499			167,737			(14,845		)	(226,976		)	71,580
Net income attributable to the noncontrolling interests	—			—			—			(415		)	—			(415		)
Net income (loss) attributable to Sinclair Broadcast Group	$	71,165		$	74,499		$	167,737		$	(15,260	)	$	(226,976	)	$	71,165
Comprehensive income (loss)	$	71,464		$	74,383		$	167,737		$	(15,260	)	$	(226,860	)	$	71,464

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	694,520		$	44,179		$	(6,537	)	$	732,162
Program and production	—			291			190,169			158			(6,520		)	184,098
Selling, general and administrative	2,117			38,720			102,075			2,999			(283		)	145,628
Depreciation, amortization and other operating expenses	1,148			1,282			150,636			39,636			(447		)	192,255
Total operating expenses	3,265			40,293			442,880			42,793			(7,250		)	521,981
Operating (loss) income	(3,265		)	(40,293		)	251,640			1,386			713			210,181
Equity in earnings of consolidated subsidiaries	86,991			156,249			—			—			(243,240		)	—
Interest expense	(999		)	(84,277		)	(3,695		)	(18,651		)	15,621			(92,001		)
Other income (expense)	2,192			53			85			7,751			(340		)	9,741
Total other income (expense)	88,184			72,025			(3,610		)	(10,900		)	(227,959		)	(82,260		)
Income tax benefit (provision)	745			38,414			(88,485		)	7,141			—			(42,185		)
(Loss) income from discontinued operations	—			(202		)	24			—			—			(178		)
Net income (loss)	85,664			69,944			159,569			(2,373		)	(227,246		)	85,558
Net loss attributable to the noncontrolling interests	—			—			—			106			—			106
Net income (loss) attributable to Sinclair Broadcast Group	$	85,664		$	69,944		$	159,569		$	(2,267	)	$	(227,246	)	$	85,664
Comprehensive income	$	85,804		$	70,190		$	159,569		$	(2,267	)	$	(227,492	)	$	85,804

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(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	$	(3,042	)	$	(66,985	)	$	208,126		$	(816	)	$	13,356		$	150,639
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,253		)	(21,109		)	(5,414		)	—			(28,776		)
Payments for acquisitions of television stations	—			—			(495,440		)	—			—			(495,440		)
Payments for acquisitions in other operating divisions	—			—			—			(4,650		)	—			(4,650		)
Purchase of alarm monitoring contracts	—			—			1,114			(13,042		)	—			(11,928		)
Proceeds from sale of broadcast assets	—			—			27,992			—			—			27,992
Decrease in restricted cash	—			(38,930		)	—			(2,102		)	—			(41,032		)
Other, net	1,648			—			4,454			1,898			(10,908		)	(2,908		)
Net cash flows (used in) from investing activities	1,648			(41,183		)	(482,989		)	(23,310		)	(10,908		)	(556,742		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			1,146,789			—			52,026			—			1,198,815
Repayments of notes payable, commercial bank financing and capital leases	(234		)	(985,755		)	(802		)	(11,294		)	—			(998,085		)
Proceeds from the sale of common stock	472,400			—			—			—			—			472,400
Dividends paid on Class A and Class B Common Stock	(41,938		)	—			235			—			(235		)	(41,938		)
Increase (decrease) in intercompany payables	(429,664		)	154,648			292,696			(4,549		)	(13,131		)	—
Other, net	830			(20,205		)	(554		)	(9,949		)	10,918			(18,960		)
Net cash flows (used in) from financing activities	1,394			295,477			291,575			26,234			(2,448		)	612,232
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			187,309			16,712			2,108			—			206,129
CASH AND CASH EQUIVALENTS, beginning of period	—			7,230			199			15,436			—			22,865
CASH AND CASH EQUIVALENTS, end of period	$	—		$	194,539		$	16,911		$	17,544		$	—		$	228,994

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(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	$	(460	)	$	(75,408	)	$	228,829		$	9,428		$	915		$	163,304
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,458		)	(25,624		)	(2,075		)	—			(30,157		)
Payments for acquisitions of television stations	—			—			(590,917		)	—			—			(590,917		)
Purchase of alarm monitoring contracts	—			—			—			(7,343		)	—			(7,343		)
Decrease in restricted cash	—			15,849			—			—			—			15,849
Other, net	740			—			63			2,502			—			3,305
Net cash flows (used in) from investing activities	740			13,391			(616,478		)	(6,916		)	—			(609,263		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			596,275			—			19.432			—			615,707
Repayments of notes payable, commercial bank financing and capital leases	(308		)	(79,077		)	(458		)	(16,002		)	—			(95,845		)
Dividends paid on Class A and Class B Common Stock	(31,646		)	—			—			—			401			(31,245		)
Increase (decrease) in intercompany payables	32,087			(435,595		)	389,771			15,053			(1,316		)	—
Other, net	(413		)	(8,364		)	(1,489		)	(734		)	—			(11,000		)
Net cash flows (used in) from financing activities	(280		)	73,239			387,824			17,749			(915		)	477,617
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			11,222			175			20,261			—			31,658
CASH AND CASH EQUIVALENTS, beginning of period	—			188			313			12,466			—			12,967
CASH AND CASH EQUIVALENTS, end of period	$	—		$	11,410		$	488		$	32,727		$	—		$	44,625

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2013

EARNINGS PER SHARE

EARNINGS PER SHARE

5. EARNINGS PER SHARE

The following table reconciles income (numerator) and shares (denominator) used in our computations of diluted earnings per share for the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Income (Numerator)
Income from continuing operations	$	30,551		$	26,477		$	60,022		$	85,736
Income impact of assumed conversion of the 4.875% Notes, net of taxes	—			45			—			135
Net (income) loss attributable to noncontrolling interests included in continuing operations	(309		)	(107		)	(415		)	106
Numerator for diluted earnings per common share from continuing operations available to common shareholders	30,242			26,415			59,607			85,977
Income (loss) from discontinued operations, net of taxes	6,100			(125		)	11,558			(178		)
Numerator for diluted earnings available to common shareholders	$	36,342		$	26,290		$	71,165		$	85,799
Shares (Denominator)
Weighted-average common shares outstanding	99,473			81,081			90,982			80,990
Dilutive effect of stock settled appreciation rights, restricted stock awards and outstanding stock options	766			44			567			23
Dilutive effect of 4.875% Notes	—			254			—			254
Weighted-average common and common equivalent shares outstanding	100,239			81,379			91,549			81,267

Potentially dilutive securities representing zero and 1.4 million shares of common stock for the three months ended September 30, 2013 and 2012, respectively, and zero and 1.5 million shares of common stock for the nine months ended September 30, 2013 and 2012, respectively, were excluded from the computation of diluted earnings per common share for these periods because their effect would have been antidilutive.  The decrease in potentially dilutive securities is primarily related to the increase in share price during the quarter ending September 30, 2013.

The diluted effect of the 3.0% Notes are excluded from diluted earnings available to common shareholders and the weighted-average common and common equivalent shares outstanding, for the three and nine month periods ended September 30, 2013, due to the conversion of the 3.0% Notes on September 20, 2013 and settled in cash on October 24, 2013.  The dilutive effect of the 3.0% Notes would have had affected diluted earnings per share by less than $0.01, for the three and nine month periods ended September 30, 2013.  See Note 4. Notes Payable and Commercial Bank Financing for further discussion.

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2013

Acquisitions

Schedule of unaudited pro forma results of continuing operations

The following table sets forth unaudited pro forma results of continuing operations for the three and nine months ended September 30, 2012, assuming that the acquisitions of the Freedom, Newport, and Fisher stations discussed above, along with transactions necessary to finance the acquisitions, occurred at the beginning of the annual period presented (in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Total revenues	$	354,545	$	335,849	$	1,030,175	$	972,305
Net Income	$	28,380	$	29,877	$	57,487	$	84,146
Net Income attributable to Sinclair Broadcast Group	$	28,071	$	29,733	$	57,072	$	84,139
Basic and diluted earnings per share attributable to Sinclair Broadcast Group	$	0.28	$	0.37	$	0.70	$	1.04

Four Points

Acquisitions

Schedule of initial allocated fair value of acquired assets and liabilities assumed

The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	456
Program contract costs	3,731
Property and equipment	34,578
Broadcast licenses	10,658
Definite-lived intangible assets	93,800
Other assets	548
Accrued liabilities	(381		)
Program contracts payable	(5,157		)
Fair value of identifiable net assets acquired	138,233
Goodwill	60,843
Total	$	199,076

Freedom

Acquisitions

Schedule of initial allocated fair value of acquired assets and liabilities assumed

The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	373
Program contract costs	3,520
Property and equipment	54,109
Broadcast licenses	10,424
Definite-lived intangible assets	140,963
Other assets	278
Accrued liabilities	(589		)
Program contracts payable	(3,404		)
Fair value of identifiable net assets acquired	205,674
Goodwill	179,609
Total	$	385,283

Fisher Communications

Acquisitions

Schedule of initial allocated fair value of acquired assets and liabilities assumed

The allocated fair value of acquired assets and assumed liabilities is summarized as follows (in thousands):

Cash	$	13,531
Accounts Receivable	29,962
Prepaid expenses and other current assets	2,079
Program contract costs	10,954
Property and equipment	48,616
Broadcast licenses	11,058
Definite-lived intangible assets	156,332
Other assets	24,632
Assets Held for Sale	5,900
Accounts payable and accrued liabilities	(20,342		)
Program contracts payable	(10,954		)
Deferred Tax Liability	(50,416		)
Other long-term liabilities	(25,482		)
Fair value of identifiable net assets acquired	195,870
Goodwill	177,326
Total	$	373,196

Newport

Acquisitions

Schedule of initial allocated fair value of acquired assets and liabilities assumed

The initial allocated fair value of acquired assets and assumed liabilities, including the assets owned by VIEs, is summarized as follows (in thousands):

Prepaid expenses and other current assets	$	1,390
Program contract costs	10,378
Property and equipment	53,883
Broadcast licenses	15,581
Definite-lived intangible assets	240,013
Other assets	1,097
Accrued liabilities	(3,928		)
Program contracts payable	(11,634		)
Fair value of identifiable net assets acquired	306,780
Goodwill	164,621
Total	$	471,401

Other acquisitions

Acquisitions

Schedule of initial allocated fair value of acquired assets and liabilities assumed

We allocated the total purchase price of these within the respective years, as follows (in thousands):

	2013			2012
Prepaid expenses and other current assets	$	1,991		$	160
Program contract costs	7,594			1,638
Property and equipment	35,439			16,545
Broadcast licenses	1,611			2,679
Definite-lived intangible assets	48,049			22,546
Accrued liabilities	(2,086		)	(1,178		)
Program contracts payable	(7,625		)	(4,252		)
Fair value of identifiable net assets acquired	84,973			38,138
Goodwill	50,674			10,661
Total	$	135,647		$	48,799

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies)

9 Months Ended

Sep. 30, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and VIEs for which we are the primary beneficiary.  Noncontrolling interests represents a minority owner’s proportionate share of the equity in certain of our consolidated entities.  All intercompany transactions and account balances have been eliminated in consolidation.

Discontinued Operations

Discontinued Operations

In accordance with Financial Accounting Standards Board’s (FASB) guidance on reporting assets held for sale, we reported the financial position and results of operations of our stations in Lansing, Michigan (WLAJ-TV) and Providence, Rhode Island (WLWC-TV), as assets and liabilities held for sale in the accompanying consolidated balance sheets and discontinued operations consolidated statements of operations.  Discontinued operations have not been segregated in the consolidated statements of cash flows and, therefore, amounts for certain captions will not agree with the accompanying consolidated balance sheets and consolidated statements of operations. WLAJ-TV was acquired in the second quarter of 2012 in connection with the acquisition of the television stations from Freedom Communications (Freedom). WLWC-TV was acquired in the first quarter of 2012 in connection with the acquisition of the television stations from Four Points Media Group LLC (Four Points). See Note 2. Acquisitions for more information.  In October 2012, we entered into an agreement to sell all the assets of WLAJ-TV to an unrelated third party for $14.4 million.  In January 2013, we entered into an agreement to sell the assets of WLWC-TV to an unrelated third party for $13.8 million.  The operating results of WLAJ-TV, which was sold effective March 1, 2013, and WLWC-TV, which was sold effective April 1, 2013, are not included in our consolidated results of operations from continuing operations for the three and nine months ending September 30, 2013 and 2012. Total revenues for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, were $0.6 million and $1.6 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the three months ending September 30, 2012, are $1.1 million and $1.8 million, respectively.  Total revenues of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are $2.2 million and $4.7 million, respectively.  Total income before taxes for WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2013, are $0.2 million and $0.4 million, respectively, and total income(loss) before taxes of WLAJ-TV and WLWC-TV, which are included in discontinued operations for the nine months ending September 30, 2012, are less than $(0.1) million and $0.1 million, respectively.  The resulting gain on the sale of these stations in 2013 was negligible.

Additionally, we recognized a $6.1 and $11.2 million income tax benefit for the three and nine months ended September 30, 2013, respectively, attributable to the adjustment of certain liabilities for unrecognized tax benefits related to discontinued operations. See discussion under Income Taxes below.

Variable Interest Entities

Variable Interest Entities

In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE.  We consolidate VIEs when we are the primary beneficiary.  The assets of each of our consolidated VIEs can only be used to settle the obligations of the VIE. All the liabilities, including debt held by our VIEs, are non-recourse to us except for Cunningham Broadcasting Company’s (Cunningham) and Deerfield Media, Inc.’s (Deerfield) debt which we guarantee.

We have entered into local marketing agreements (LMAs) to provide programming, sales and managerial services for television stations of Cunningham, the license owner of seven television stations as of September 30, 2013.  We pay LMA fees to Cunningham and also reimburse all operating expenses.  We also have an acquisition agreement in which we have a purchase option to buy the license assets of the television stations which includes the Federal Communication Commission (FCC) license and certain other assets used to operate the station (License Assets).  Our applications to acquire the FCC licenses are pending approval.  We own the majority of the non-license assets of the Cunningham stations and our Bank Credit Agreement contains certain default provisions whereby insolvency of Cunningham would cause an event of default under our Bank Credit Agreement.  We have determined that the Cunningham stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and the cross-default provisions with our Bank Credit Agreement, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Cunningham.  See Note 6. Related Person Transactions for more information on our arrangements with Cunningham.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $25.9 million and $25.5 million, respectively, that relate to LMAs with Cunningham.  For the nine months ended September 30, 2013 and 2012, Cunningham’s stations provided us with approximately $80.3 million and $73.5 million, respectively, of net broadcast revenues.

We have entered into joint sales agreements (JSAs), shared services agreements (SSAs), and LMAs to provide certain services for the television stations of Deerfield, the license owner of eight television stations as of September 30, 2013.  The initial term of each of the JSAs and SSAs is eight years from the commencement and the agreements may be automatically renewed for successive eight year renewal terms.  We also have purchase options to buy the License Assets of the television stations. We own the majority of the non-license assets of the Deerfield stations and we have also guaranteed the debt of Deerfield.  Additionally, there are leases in place whereby Deerfield leases assets owned by us in order to perform its duties under FCC rules. We have determined that the Deerfield stations are VIEs and that based on the terms of the agreements, the significance of our investment in the stations and our guarantee of Deerfield’s debt, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIEs through the sales and managerial services we provide and we absorb losses and returns that would be considered significant to Deerfield.  Included in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2013 are net revenues of $20.8 million and $59.8 million, respectively, that relate to agreements with Deerfield.

We have outsourcing agreements with certain other license owners, under which we provide certain non-programming related sales, operational and administrative services.  We pay a fee to the license owners based on a percentage of broadcast cash flow and we reimburse all operating expenses.  We also have purchase options to buy the License Assets of these television stations.  We have determined that the License Assets of these stations are VIEs, and, based on the terms of the agreements and the significance of our investment in the stations, we are the primary beneficiary of the variable interests because, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the sales and managerial services we provide and because we absorb losses and returns that would be considered significant to the VIEs.  Included in the accompanying consolidated statements of operations for the three months ended September 30, 2013 and 2012 are net broadcast revenues of $11.1 million and $2.6 million, respectively, that relate to these arrangements. For the nine months ended September 30, 2013 and 2012, net broadcast revenues of $30.3 million and $11.9 million, respectively, related to these arrangements.

As of the dates indicated, the carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets for the periods presented (in thousands):

	As of September 30,2013		As of December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,243	$	3,805
Accounts receivable	1,608		110
Income taxes receivable	—		94
Current portion of program contract costs	6,529		6,113
Prepaid expenses and other current assets	221		124
Total current asset	19,601		10,246
PROGRAM CONTRACT COSTS, less current portion	2,380		1,484
PROPERTY AND EQUIPMENT, net	14,739		10,806
RESTRICTED CASH	2,102		—
GOODWILL	13,812		6,357
BROADCAST LICENSES	16,832		14,927
DEFINITE-LIVED INTANGIBLE ASSETS, net	67,237		51,368
OTHER ASSETS	12,242		12,723
Total assets	$	148,945	$	107,911
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	28	$	15
Accrued liabilities	1,130		186
Current portion of notes payable, capital leases and commercial bank financing	5,039		2,123
Current portion of program contracts payable	8,224		8,991
Total current liabilities	14,421		11,315
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	45,122		20,238
Program contracts payable, less current portion	2,954		2,080
Total liabilities	$	62,497	$	33,633

The amounts above represent the consolidated assets and liabilities of the VIEs related to our LMAs, JSAs, SSAs and other outsourcing agreements, as discussed above, for which we are the primary beneficiary, and have been aggregated as they all relate to our broadcast business.  Excluded from the amounts above are payments made to Cunningham under the LMAs which are treated as a prepayment of the purchase price of the stations and capital leases between us and Cunningham which are eliminated in consolidation.  The total payments made under these LMAs as of September 30, 2013 and December 31, 2012, which are excluded from liabilities above, were $32.4 million and $29.8 million, respectively.  The total capital lease liabilities excluded from above were $11.6 million and $11.7 million as of September 30, 2013 and December 31, 2012, respectively.  During the nine months ended September 30, 2013, Cunningham sold a portion of its investment in our Class A Common Stock which is eliminated in consolidation and excluded from assets shown above, for $7.0 million, net of income taxes and has been reflected as an increase in additional paid in capital in the consolidated balance sheet.  Also excluded from the amounts above are liabilities associated with the JSAs, SSAs, and option agreements with the other VIEs totaling $45.2 million and $36.2 million as of September 30, 2013 and December 31, 2012, respectively, as these amounts are eliminated in consolidation.  The risk and reward characteristics of the VIEs are similar.

In the fourth quarter of 2011, we began providing sales, programming and management services to the Freedom stations pursuant to a LMA.  Effective April 1, 2012, we completed the acquisition of the Freedom stations and the LMA was terminated. We determined that the Freedom stations were VIEs during the period of the LMA based on the terms of the agreement.  We were not the primary beneficiary because the owner of the stations had the power to direct the activities of the VIEs that most significantly impacted the economic performance of the VIEs.  In the consolidated statements of operations for the nine months ended September 30, 2012 are net broadcast revenues of $10.0 million and station production expenses of $7.8 million related to the Freedom LMAs during the second quarter of 2012.

We have investments in other real estate ventures and investment companies which are considered VIEs.  However, we do not participate in the management of these entities including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.  We account for these entities using the equity or cost method of accounting.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying amount		Maximum exposure		Carrying amount		Maximum exposure
Investments in real estate ventures	$	3,545	$	3,545	$	3,648	$	3,648
Investments in investment companies	26,064		26,064		27,335		27,335
Total	$	29,609	$	29,609	$	30,983	$	30,983

The carrying amounts above are included in other assets in the consolidated balance sheets.  The income and loss related to these investments are recorded in income from equity and cost method investments in the consolidated statement of operations.  We recorded income of $0.7 million and $0.3 million in the three months ended September 30, 2013 and 2012, respectively.  We recorded income of $1.4 million and $7.0 million for the nine months ended September 30, 2013 and 2012, respectively.

Our maximum exposure is equal to the carrying value of our investments.  As of September 30, 2013 and December 31, 2012, our unfunded commitments related to private equity investment funds totaled $16.9 million and $8.9 million, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2012, the FASB issued new guidance for testing indefinite-lived intangible assets for impairment.  The new guidance allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar to the approach now applied to goodwill.  Companies can first determine based on certain qualitative factors whether it is “more likely than not” (a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired.  The new standard is intended to reduce the cost and complexity of testing indefinite-lived intangible assets for impairment.  The revised standard is effective for annual and interim impairment tests performed for fiscal years beginning after September 30, 2012 and early adoption is permitted. We adopted this new guidance in the fourth quarter of 2012 when completing our annual impairment analysis. This guidance impacted how we perform our annual impairment testing for indefinite-lived intangible assets and changed our related disclosures for 2012; however, it does not have an impact on our consolidated financial statements as the guidance does not impact the timing or amount of any resulting impairment charges.

In February 2013, the FASB issued new guidance requiring disclosure of items reclassified out of accumulated other comprehensive income (AOCI).  This new guidance requires entities to present (either on the face of the income statement or in the notes) the effects on the line items of the income statement for amounts reclassified out of AOCI.  The new guidance is effective for annual and interim periods beginning after December 15, 2012.  This guidance does not have a material impact on our financial statements.

In July 2013, the FASB issued new guidance requiring new disclosure of unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. If a company does not have: (i) a net operating loss carryforward; (ii) a similar tax loss; or (iii) a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the entity does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The authoritative guidance is effective for fiscal years and the interim periods within those fiscal years beginning on or after December 15, 2013 and should be applied on a prospective basis. We are currently evaluating the impact of this requirement on our financial statements.

Use of Estimates

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities.  Actual results could differ from those estimates.

Restricted Cash

Restricted Cash

During the nine months ending September 2013, we deposited $40.6 million into escrow accounts pursuant to agreements for the acquisitions of Barrington, TTBG, and New Age.  See Note 3. Commitments and Contingencies for more information on these pending acquisitions.  These escrow deposits are classified as restricted cash within noncurrent assets in the consolidated balance sheet as of September 30, 2013.

Additionally, under the terms of certain lease agreements, as of September 30, 2013 and December 31, 2012, we were required to hold $0.2 million of restricted cash related to the removal of analog equipment from some of our leased towers.

Revenue Recognition

Revenue Recognition

Total revenues include: (i) cash and barter advertising revenues, net of agency commissions; (ii) retransmission consent fees; (iii) network compensation; (iv) other broadcast revenues and (v) revenues from our other operating divisions.

Advertising revenues, net of agency commissions, are recognized in the period during which time spots are aired.

Our retransmission consent agreements contain both advertising and retransmission consent elements.  We have determined that our retransmission consent agreements are revenue arrangements with multiple deliverables.  Advertising and retransmission consent deliverables sold under our agreements are separated into different units of accounting at fair value.   Revenue applicable to the advertising element of the arrangement is recognized similar to the advertising revenue policy noted above.  Revenue applicable to the retransmission consent element of the arrangement is recognized over the life of the agreement.

Network compensation revenue is recognized over the term of the contract. All other revenues are recognized as services are provided.

Income Taxes

Income Taxes

Our income tax provision for all periods consists of federal and state income taxes.  The tax provision for the three and nine months ended September 30, 2013 and 2012 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized.  In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income.  In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis.  A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months and nine months ended September 30, 2013 was lower than the statutory rate primarily due to: 1) a release of a valuation allowance related to state NOL carryforwards, of $5.3 million, net of taxes, due to a law change in a state tax jurisdiction, effective for years beginning after December 31, 2014, which we expect will significantly increase the forecasted future taxable income attributable to that state and result in utilization of the state NOL carryforwards and 2) a $2.2 million adjustment to the income tax provision upon finalization of the 2012 federal income tax return, primarily related to higher than originally projected available income tax deductions.

Our effective income tax rate for the three months ended September 30, 2012 was greater than the statutory rate primarily due to an increase in the income tax reserves related to a state audit settlement in 2012.

Our effective income tax rate nine months ended September 30, 2012 was lower than the statutory rate primarily due to a release of valuation allowance of $7.7 million related to certain deferred tax assets of Cunningham as the weight of all available evidence supports realization of the deferred tax assets. The valuation allowance release determination was based primarily on the sufficiency of forecasted taxable income necessary to utilize NOLs expiring in years 2022 — 2029.  This VIE files separate income tax returns.  Any resulting tax liabilities are nonrecourse to us and we are not entitled to any benefit resulting from the deferred tax assets of the VIE.

As previously discussed above under Discontinued Operations, during the three months ended September 30, 2013, we reduced our liability for unrecognized tax benefits by $6.1 million related to discontinued operations, as we now believe that it is more likely than not that our previously unrecognized state tax position would be sustained upon review of the state tax authority, based on new information obtained during the period.  Additionally, during the second quarter of 2013, we reduced our liability for unrecognized tax benefits by $5.1 million related to discontinued operations, upon the application of limits under an available state administrative practice exception.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the current year’s presentation.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013 Class A Common Stock	Nov. 01, 2013 Class B Common Stock
Entity Listings
Entity Registrant Name	SINCLAIR BROADCAST GROUP INC
Entity Central Index Key	0000912752
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		73,912,097	26,262,210
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Tables)

9 Months Ended

Sep. 30, 2013

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Schedule of carrying amounts and classification of assets and liabilities of VIEs

As of the dates indicated, the carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets for the periods presented (in thousands):

	As of September 30,2013		As of December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,243	$	3,805
Accounts receivable	1,608		110
Income taxes receivable	—		94
Current portion of program contract costs	6,529		6,113
Prepaid expenses and other current assets	221		124
Total current asset	19,601		10,246
PROGRAM CONTRACT COSTS, less current portion	2,380		1,484
PROPERTY AND EQUIPMENT, net	14,739		10,806
RESTRICTED CASH	2,102		—
GOODWILL	13,812		6,357
BROADCAST LICENSES	16,832		14,927
DEFINITE-LIVED INTANGIBLE ASSETS, net	67,237		51,368
OTHER ASSETS	12,242		12,723
Total assets	$	148,945	$	107,911
LIABILITIES
CURRENT LIABILITIES:
Accounts payable	$	28	$	15
Accrued liabilities	1,130		186
Current portion of notes payable, capital leases and commercial bank financing	5,039		2,123
Current portion of program contracts payable	8,224		8,991
Total current liabilities	14,421		11,315
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	45,122		20,238
Program contracts payable, less current portion	2,954		2,080
Total liabilities	$	62,497	$	33,633

Schedule of carrying amounts of investment in VIEs for which the entity is not the primary beneficiary

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary for the periods presented (in thousands):

	As of September 30, 2013				As of December 31, 2012
	Carrying amount		Maximum exposure		Carrying amount		Maximum exposure
Investments in real estate ventures	$	3,545	$	3,545	$	3,648	$	3,648
Investments in investment companies	26,064		26,064		27,335		27,335
Total	$	29,609	$	29,609	$	30,983	$	30,983