16. CONDENSED CONSOLIDATED 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 5.625% Notes, 6.125% Notes, and 6.375% Notes. Our Class A Common Stock and Class B Common Stock as of December 31, 2014, 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, 5.625% Notes, 6.125% Notes, and 6.375% Notes. As of December 31, 2014, our consolidated total debt of $3,928.7 million included $3,801.7 million of debt related to STG and its subsidiaries of which SBG guaranteed $3,752.1 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries), have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis.

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

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2014

(In thousands)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—	$	3,394	$	1,749	$	12,539		$	—		$	17,682
Accounts and other receivables	—		164		359,486		25,111			(1,258		)	383,503
Other current assets	5,741		12,996		98,751		12,721			(11,733		)	118,476
Assets held for sale	—		—		—		6,504			—			6,504
Total current assets	5,741		16,554		459,986		56,875			(12,991		)	526,165

Property and equipment, net	3,949		17,554		569,372		168,762			(7,099		)	752,538

Assets held for sale	—		—		1,843		6,974			—			8,817
Investment in consolidated subsidiaries	395,225		3,585,037		3,978		—			(3,984,240		)	—
Other long-term assets	65,988		595,112		90,914		115,375			(620,628		)	246,761
Total other long-term assets	461,213		4,180,149		96,735		122,349			(4,604,868		)	255,578

Goodwill and other intangible assets	—		1,483		3,821,985		209,724			(115,301		)	3,917,891

Total assets	$	470,903	$	4,215,740	$	4,948,078	$	557,710		$	(4,740,259	)	$	5,452,172

Accounts payable and accrued liabilities	$	541	$	46,083	$	201,102	$	24,325		$	(13,680	)	$	258,371
Current portion of long-term debt	529		42,953		1,302		68,332			—			113,116
Current portion of affiliate long-term debt	1,464		—		1,182		1,026			(1,047		)	2,625
Other current liabilities	1,208		—		107,867		9,749			(1,407		)	117,417
Liabilities held for sale	—		—		—		2,477			—			2,477
Total current liabilities	3,742		89,036		311,453		105,909			(16,134		)	494,006

Long-term debt	—		3,679,004		34,338		83,324			—			3,796,666
Affiliate long-term debt	3,508		—		12,802		319,901			(319,902		)	16,309
Other liabilities	35,771		28,856		1,003,213		169,935			(497,927		)	739,848
Total liabilities	43,021		3,796,896		1,361,806		679,069			(833,963		)	5,046,829

Total Sinclair Broadcast Group equity (deficit)	427,882		418,844		3,586,272		(94,632		)	(3,910,484		)	427,882
Noncontrolling interests in consolidated subsidiaries	—		—		—		(26,727		)	4,188			(22,539		)
Total liabilities and equity (deficit)	$	470,903	$	4,215,740	$	4,948,078	$	557,710		$	(4,740,259	)	$	5,452,172

CONDENSED CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2013

(In thousands)

	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—	$	237,974	$	28,594	$	13,536		$	—		$	280,104
Accounts and other receivables	59		818		281,822		27,479			(1,022		)	309,156
Other current assets	5,500		25,887		67,279		16,391			(6,446		)	108,611
Total current assets	5,559		264,679		377,695		57,406			(7,468		)	697,871

Property and equipment, net	5,017		13,561		454,917		130,019			(7,443		)	596,071

Investment in consolidated subsidiaries	363,231		2,508,058		4,179		—			(2,875,468		)	—
Restricted cash — long term	—		11,524		223		—			—			11,747
Other long-term assets	78,849		503,674		62,435		132,840			(544,881		)	232,917
Total other long-term assets	442,080		3,023,256		66,837		132,840			(3,420,349		)	244,664

Goodwill and other intangible assets	—		—		2,486,794		214,325			(92,253		)	2,608,866

Total assets	$	452,656	$	3,301,496	$	3,386,243	$	534,590		$	(3,527,513	)	$	4,147,472

Accounts payable and accrued liabilities	$	234	$	51,781	$	126,245	$	17,161		$	753		$	196,174
Current portion of long-term debt	556		37,335		1,007		6,900			548			46,346
Current portion of affiliate long-term debt	1,294		—		1,073		1,003			(1,003		)	2,367
Other current liabilities	3,529		—		87,612		9,645			(2,292		)	98,494
Total current liabilities	5,613		89,116		215,937		34,709			(1,994		)	343,381

Long-term debt	529		2,793,334		35,709		135,071			1,759			2,966,402
Affiliate long-term debt	4,972		—		13,984		294,919			(294,950		)	18,925
Other liabilities	45,172		23,645		610,491		145,828			(412,076		)	413,060
Total liabilities	56,286		2,906,095		876,121		610,527			(707,261		)	3,741,768

Total Sinclair Broadcast Group equity (deficit)	396,370		395,401		2,510,122		(85,271		)	(2,820,252		)	396,370
Noncontrolling interests in consolidated subsidiaries	—		—		—		9,334			—			9,334
Total liabilities and equity (deficit)	$	452,656	$	3,301,496	$	3,386,243	$	534,590		$	(3,527,513	)	$	4,147,472

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2014

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	1,870,408		$	192,616		$	(86,466	)	$	1,976,558

Program and production	—			76			573,725			84,592			(81,380		)	577,013
Selling, general and administrative	4,320			57,799			359,880			20,099			(2,079		)	440,019
Depreciation, amortization and other operating expenses	1,068			5,425			367,514			92,635			(1,767		)	464,875
Total operating expenses	5,388			63,300			1,301,119			197,326			(85,226		)	1,481,907

Operating (loss) income	(5,388		)	(63,300		)	569,289			(4,710		)	(1,240		)	494,651

Equity in earnings of consolidated subsidiaries	211,782			373,228			(201		)	—			(584,809		)	—
Interest expense	(573		)	(163,347		)	(4,869		)	(27,364		)	21,291			(174,862		)
Other income (expense)	4,377			(14,651		)	998			2,024			10			(7,242		)
Total other income (expense)	215,586			195,230			(4,072		)	(25,340		)	(563,508		)	(182,104		)

Income tax benefit	2,081			83,897			(185,193		)	1,783			—			(97,432		)
Net income (loss)	212,279			215,827			380,024			(28,267		)	(564,748		)	215,115
Net loss attributable to the noncontrolling interests	—			—			—			(2,836		)	—			(2,836		)
Net income (loss) attributable to Sinclair Broadcast Group	$	212,279		$	215,827		$	380,024		$	(31,103	)	$	(564,748	)	$	212,279
Comprehensive Income	$	211,759		$	213,284		$	378,926		$	(27,982	)	$	(564,228	)	$	211,759

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2013

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	1,296,736		$	123,017		$	(56,622	)	$	1,363,131

Program and production	15			357			391,410			50,950			(57,628		)	385,104
Selling, general and administrative	3,733			48,363			241,548			9,132			82			302,858
Depreciation, amortization and other operating expenses	1,307			3,105			275,889			71,319			(471		)	351,149
Total operating expenses	5,055			51,825			908,847			131,401			(58,017		)	1,039,111

Operating (loss) income	(5,055		)	(51,825		)	387,889			(8,384		)	1,395			324,020

Equity in earnings of consolidated subsidiaries	97,138			309,388			1,009			—			(407,535		)	—
Interest expense	(1,083		)	(152,174		)	(4,965		)	(25,624		)	20,909			(162,937		)
Other income (expense)	4,633			(59,033		)	245			5,361			(6,781		)	(55,575		)
Total other income (expense)	100,688			98,181			(3,711		)	(20,263		)	(393,407		)	(218,512		)

Income tax benefit	(22,165		)	47,645			(73,266		)	2,637			3,900			(41,249		)
Income from discontinued operations, net of taxes	—			11,063			495			—			—			11,558
Net income (loss)	73,468			105,064			311,407			(26,010		)	(388,112		)	75,817
Net loss attributable to the noncontrolling interests	—			—			—			(2,349		)	—			(2,349		)
Net income (loss) attributable to Sinclair Broadcast Group	$	73,468		$	105,064		$	311,407		$	(28,359	)	$	(388,112	)	$	73,468
Comprehensive Income	$	78,257		$	107,243		$	311,407		$	(28,098	)	$	(388,112	)	$	78,257

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2012

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	1,008,146		$	64,909		$	(11,376	)	$	1,061,679

Program and production	—			322			263,802			1,400			(9,968		)	255,556
Selling, general and administrative	2,853			28,762			168,540			6,082			(1,567		)	204,670
Depreciation, amortization and other operating expenses	1,523			1,890			213,681			55,802			(728		)	272,168
Total operating expenses	4,376			30,974			646,023			63,284			(12,263		)	732,394

Operating (loss) income	(4,376		)	(30,974		)	362,123			1,625			887			329,285

Equity in losses of consolidated subsidiaries	144,620			194,686			(123		)	—			(339,183		)	—
Interest expense	(1,317		)	(118,491		)	(4,840		)	(24,780		)	20,875			(128,553		)
Other income (expense)	5,245			38,677			(39,781		)	8,690			(1,223		)	11,608
Total other income (expense)	148,548			114,872			(44,744		)	(16,090		)	(319,531		)	(116,945		)

Income tax benefit	494			41,709			(118,519		)	8,464			—			(67,852		)
Loss from discontinued operations, net of taxes	—			(269		)	734			—			—			465
Net income (loss)	144,666			125,338			199,594			(6,001		)	(318,644		)	144,953
Net loss attributable to the noncontrolling interests	—			—			—			(287		)	—			(287		)
Net income (loss) attributable to Sinclair Broadcast Group	$	144,666		$	125,338		$	199,594		$	(6,288	)	$	(318,644	)	$	144,666
Comprehensive Income	$	144,808		$	125,193		$	199,594		$	(6,288	)	$	(318,499	)	$	144,808

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(26,528	)	$	(147,940	)	$	628,103		$	(35,694	)	$	12,513		$	430,454
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(8,864		)	(71,152		)	(2,722		)	1,280			(81,458		)
Payments for acquisitions of television stations	—			—			(1,485,039		)	—			—			(1,485,039		)
Proceeds from the sale of broadcast assets	—			—			176,675			—			—			176,675
Payments for acquisitions of assets of other operating divisions
Purchase of alarm monitoring contracts	—			—			—			(27,701		)	—			(27,701		)
(Increase) decrease in restricted cash	—			11,525			91			—			—			11,616
Investments in equity and cost method investees	—			—			—			(8,104		)	—			(8,104		)
Proceeds from insurance settlement	—			17,042			—			—			—			17,042
Other, net	1,000			—			392			(1,779		)	—			(387		)
Net cash flows from (used in) investing activities	1,000			19,703			(1,379,033		)	(40,306		)	1,280			(1,397,356		)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			1,466,500			507			33,713			—			1,500,720
Repayments of notes payable, commercial bank financing and capital leases	(556		)	(574,584		)	(1,028		)	(6,596		)	—			(582,764		)
Repurchase of outstanding Class A Common Stock	(133,157		)	—			—			—			—			(133,157		)
Dividends paid on Class A and Class B common stock	(61,103		)	—			—			—			—			(61,103		)
Payments for deferred financing costs	—			(16,590		)	—			—			—			(16,590		)
Noncontrolling interest (contributions) distributions	—			—			—			(8,184		)	—			(8,184		)
Increase (decrease) in intercompany payables	218,081			(981,669		)	725,678			51,703			(13,793		)	—
Other, net	2,263			—			(1,072		)	4,367			—			5,558
Net cash flows from (used in) financing activities	25,528			(106,343		)	724,085			75,003			(13,793		)	704,480

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			(234,580		)	(26,845		)	(997		)	—			(262,422		)
CASH AND CASH EQUIVALENTS, beginning of period	—			237,974			28,594			13,536			—			280,104
CASH AND CASH EQUIVALENTS, end of period	$	—		$	3,394		$	1,749		$	12,539		$	—		$	17,682

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2013

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(37,107	)	$	(264,925	)	$	444,680		$	(40,414	)	$	58,343		$	160,577
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(2,700		)	(35,659		)	(5,029		)	—			(43,388		)
Payments for acquisitions of television stations	—			—			(998,664		)	(50,480		)	43,000			(1,006,144		)
Proceeds from the sale of broadcast assets	—			—			71,738			21,000			(43,000		)	49,738
Payments for acquisitions of assets of other operating divisions	—			—			—			(4,650		)	—			(4,650		)
Purchase of alarm monitoring contracts	—			—			—			(23,721		)	—			(23,721		)
(Increase) decrease in restricted cash	—			(11,522		)	—			—			—			(11,522		)
Investments in equity and cost method investees	—			—			—			(10,767		)	—			(10,767		)
Investment in marketable securities	—			—			—			(696		)	(10,908		)	(11,604		)
Other, net	1,648			—			50			9,119			—			10,817
Net cash flows (used in) from investing activities	1,648			(14,222		)	(962,535		)	(65,224		)	(10,908		)	(1,051,241		)

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			2,189,753			—			88,540			—			2,278,293
Repayments of notes payable, commercial bank financing and capital leases	(482		)	(1,473,898		)	(1,069		)	(34,311		)	—			(1,509,760		)
Proceeds from the sale of Class A Common Stock	472,913			—			—			—			—			472,913
Dividends paid on Class A and Class B common stock	(56,767		)	—			—			—			—			(56,767		)
Payments for deferred financing costs	—			(27,724		)	—			—			—			(27,724		)
Noncontrolling interest distributions (contributions)	—			—			—			(10,256		)	—			(10,256		)
Increase (decrease) in intercompany payables	(371,331		)	(178,240		)	548,139			59,765			(58,333		)	—
Other, net	(8,874		)	—			(820		)	—			10,898			1,204
Net cash flows from (used in) financing activities	35,459			509,891			546,250			103,738			(47,435		)	1,147,903

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			230,744			28,395			(1,900		)	—			257,239
CASH AND CASH EQUIVALENTS, beginning of period	—			7,230			199			15,436			—			22,865
CASH AND CASH EQUIVALENTS, end of period	$	—		$	237,974		$	28,594		$	13,536		$	—		$	280,104