CONDENSED CONSOLIDATING FINANCIAL STATEMENTS | CONDENSED CONSOLIDATING FINANCIAL STATEMENTS: Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the Bank Credit Agreement, the 5.375% Notes, 5.625% Notes, 6.125% Notes, 5.875% Notes, 5.125% Notes, and until they were redeemed, the 6.375% Notes. Our Class A Common Stock and Class B Common Stock as of March 31, 2017 , 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, 5.875% Notes, 6.125% Notes, and 5.125% Notes, and until they were redeemed, the 6.375% Notes. As of March 31, 2017 , our consolidated total debt, net of deferred financing costs and debt discounts, of $4,084.0 million included $4,054.4 million related to STG and its subsidiaries of which SBG guaranteed $4,006.5 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. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10. CONDENSED CONSOLIDATING BALANCE SHEET AS OF MARCH 31, 2017 (in thousands) (unaudited) Sinclair Sinclair Guarantor Non- Eliminations Sinclair Cash $ — $ 783,197 $ 11,043 $ 21,460 $ — $ 815,700 Accounts receivable — — 484,056 27,281 (1,258 ) 510,079 Other current assets 3,318 5,812 91,411 28,614 (14,124 ) 115,031 Total current assets 3,318 789,009 586,510 77,355 (15,382 ) 1,440,810 Property and equipment, net 1,554 21,293 564,364 128,518 (3,262 ) 712,467 Investment in consolidated subsidiaries 1,096,840 3,572,811 4,179 — (4,673,830 ) — Goodwill — — 1,994,268 3,867 — 1,998,135 Indefinite-lived intangible assets — — 141,397 15,709 — 157,106 Definite-lived intangible assets — — 1,733,711 81,324 (57,755 ) 1,757,280 Other long-term assets 41,842 788,830 107,921 168,648 (855,716 ) 251,525 Total assets $ 1,143,554 $ 5,171,943 $ 5,132,350 $ 475,421 $ (5,605,945 ) $ 6,317,323 Accounts payable and accrued liabilities $ 99 $ 59,521 $ 175,775 $ 25,518 $ (14,926 ) $ 245,987 Current portion of long-term debt — 55,201 2,062 7,332 — 64,595 Current portion of affiliate long-term debt 1,407 — 828 673 (431 ) 2,477 Other current liabilities — — 144,357 11,635 (1,583 ) 154,409 Total current liabilities 1,506 114,722 323,022 45,158 (16,940 ) 467,468 Long-term debt — 3,929,497 30,351 42,705 — 4,002,553 Affiliate long-term debt — — 12,951 335,303 (333,849 ) 14,405 Other liabilities 12,896 34,210 1,192,413 190,441 (693,962 ) 735,998 Total liabilities 14,402 4,078,429 1,558,737 613,607 (1,044,751 ) 5,220,424 Total Sinclair Broadcast Group equity (deficit) 1,129,152 1,093,514 3,573,613 (101,554 ) (4,565,572 ) 1,129,153 Noncontrolling interests in consolidated subsidiaries — — — (36,632 ) 4,378 (32,254 ) Total liabilities and equity (deficit) $ 1,143,554 $ 5,171,943 $ 5,132,350 $ 475,421 $ (5,605,945 ) $ 6,317,323 CONDENSED CONSOLIDATING BALANCE SHEET AS OF DECEMBER 31, 2016 (in thousands) Sinclair Sinclair Guarantor Non- Eliminations Sinclair Cash $ — $ 232,297 $ 10,675 $ 17,012 $ — $ 259,984 Accounts receivable — — 478,190 37,024 (1,260 ) 513,954 Other current assets 5,561 3,143 124,313 25,406 (27,273 ) 131,150 Total current assets 5,561 235,440 613,178 79,442 (28,533 ) 905,088 Property and equipment, net 1,820 17,925 570,289 131,326 (3,784 ) 717,576 Investment in consolidated subsidiaries 551,250 3,614,605 4,179 — (4,170,034 ) — Goodwill — — 1,986,467 4,279 — 1,990,746 Indefinite-lived intangible assets — — 140,597 15,709 — 156,306 Definite-lived intangible assets — — 1,770,512 233,368 (59,477 ) 1,944,403 Other long-term assets $ 46,586 $ 819,506 $ 103,808 $ 169,817 $ (890,668 ) $ 249,049 Total assets $ 605,217 $ 4,687,476 $ 5,189,030 $ 633,941 $ (5,152,496 ) $ 5,963,168 Accounts payable and accrued liabilities $ 100 $ 69,118 $ 225,645 $ 48,815 $ (21,173 ) $ 322,505 Current portion of long-term debt — 55,501 1,851 113,779 — 171,131 Current portion of affiliate long-term debt 1,857 — 1,514 2,336 (2,103 ) 3,604 Other current liabilities — — 127,967 13,590 (2,324 ) 139,233 Total current liabilities 1,957 124,619 356,977 178,520 (25,600 ) 636,473 Long-term debt — 3,939,463 31,014 44,455 — 4,014,932 Affiliate long-term debt — — 12,663 396,957 (395,439 ) 14,181 Other liabilities 15,277 31,817 1,190,717 183,418 (681,583 ) 739,646 Total liabilities 17,234 4,095,899 1,591,371 803,350 (1,102,622 ) 5,405,232 Total Sinclair Broadcast Group equity (deficit) 587,983 591,577 3,597,659 (134,991 ) (4,054,245 ) 587,983 Noncontrolling interests in consolidated subsidiaries — — — (34,418 ) 4,371 (30,047 ) Total liabilities and equity (deficit) $ 605,217 $ 4,687,476 $ 5,189,030 $ 633,941 $ (5,152,496 ) $ 5,963,168 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2017 (in thousands) (unaudited) Sinclair Sinclair Guarantor Non- Eliminations Sinclair Net revenue $ — $ — $ 615,709 $ 53,386 $ (19,160 ) $ 649,935 Media program and production expenses — — 248,205 28,444 (18,494 ) 258,155 Selling, general and administrative 1,296 18,958 122,435 2,633 (25 ) 145,297 Depreciation, amortization and other operating expenses 266 1,725 111,228 (23,920 ) (445 ) 88,854 Total operating expenses 1,562 20,683 481,868 7,157 (18,964 ) 492,306 Operating (loss) income (1,562 ) (20,683 ) 133,841 46,229 (196 ) 157,629 Equity in earnings of consolidated subsidiaries 58,189 87,805 50 — (146,044 ) — Interest expense (36 ) (54,704 ) (1,119 ) (7,623 ) 6,164 (57,318 ) Other income (expense) 101 799 496 (1,021 ) — 375 Loss from extinguishment of debt — (1,404 ) — — — (1,404 ) Total other income (expense) 58,254 32,496 (573 ) (8,644 ) (139,880 ) (58,347 ) Income tax benefit (provision) 510 25,106 (44,229 ) (9,966 ) — (28,579 ) Net income (loss) 57,202 36,919 89,039 27,619 (140,076 ) 70,703 Net income attributable to the noncontrolling interests — — — (13,494 ) (7 ) (13,501 ) Net income (loss) attributable to Sinclair Broadcast Group $ 57,202 $ 36,919 $ 89,039 $ 14,125 $ (140,083 ) $ 57,202 Comprehensive income (loss) $ 57,202 $ 36,919 $ 89,039 $ 27,619 $ (140,076 ) $ 70,703 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2016 (in thousands) (unaudited) Sinclair Sinclair Guarantor Non- Eliminations Sinclair Net revenue $ — $ — $ 545,113 $ 52,250 $ (18,474 ) $ 578,889 Media program and production expenses — — 209,725 24,381 (18,229 ) 215,877 Selling, general and administrative 1,002 22,099 111,107 2,162 (20 ) 136,350 Depreciation, amortization and other operating expenses 266 1,190 108,478 30,855 (466 ) 140,323 Total operating expenses 1,268 23,289 429,310 57,398 (18,715 ) 492,550 Operating (loss) income (1,268 ) (23,289 ) 115,803 (5,148 ) 241 86,339 Equity in earnings of consolidated subsidiaries 24,287 74,855 50 — (99,192 ) — Interest expense (94 ) (46,363 ) (1,202 ) (7,897 ) 6,141 (49,415 ) Other income (expense) 1,142 118 (11 ) (364 ) — 885 Total other income (expense) 25,335 28,610 (1,163 ) (8,261 ) (93,051 ) (48,530 ) Income tax benefit (provision) 73 23,103 (38,180 ) 2,824 — (12,180 ) Net income (loss) 24,140 28,424 76,460 (10,585 ) (92,810 ) 25,629 Net income attributable to the noncontrolling interests — — — (899 ) (590 ) (1,489 ) Net income (loss) attributable to Sinclair Broadcast Group $ 24,140 $ 28,424 $ 76,460 $ (11,484 ) $ (93,400 ) $ 24,140 Comprehensive income (loss) $ 24,140 $ 28,424 $ 76,460 $ (10,585 ) $ (92,810 ) $ 25,629 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2017 (in thousands) (unaudited) Sinclair Sinclair Guarantor Non- Eliminations Sinclair NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ 1,126 $ (44,685 ) $ 127,520 $ (13,853 ) $ (466 ) $ 69,642 CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES: Acquisition of property and equipment (50 ) (3,259 ) (16,840 ) (806 ) 181 (20,774 ) Acquisition of businesses, net of cash acquired — — (8,000 ) — — (8,000 ) Purchase of alarm monitoring contracts — — — (5,682 ) — (5,682 ) Proceeds from sale of assets — — — 192,149 — 192,149 Investments in equity and cost method investees (945 ) (300 ) (47 ) (1,788 ) — (3,080 ) Other, net 2,266 (3,083 ) 357 1,006 — 546 Net cash flows (used in) from investing activities 1,271 (6,642 ) (24,530 ) 184,879 181 155,159 CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: Proceeds from notes payable, commercial bank financing and capital leases — 159,669 — 3,420 — 163,089 Repayments of notes payable, commercial bank financing and capital leases — (172,519 ) (445 ) (111,458 ) — (284,422 ) Proceeds from the issuance of Class A Common Stock 487,883 — — — — 487,883 Dividends paid on Class A and Class B Common Stock (16,257 ) — — — — (16,257 ) Noncontrolling interests distributions — — — (15,708 ) — (15,708 ) Increase (decrease) in intercompany payables (471,945 ) 615,437 (102,763 ) (40,939 ) 210 — Other, net (2,078 ) (360 ) 586 (1,893 ) 75 (3,670 ) Net cash flows from (used in) financing activities (2,397 ) 602,227 (102,622 ) (166,578 ) 285 330,915 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS — 550,900 368 4,448 — 555,716 CASH AND CASH EQUIVALENTS, beginning of period — 232,297 10,675 17,012 — 259,984 CASH AND CASH EQUIVALENTS, end of period $ — $ 783,197 $ 11,043 $ 21,460 $ — $ 815,700 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2016 (in thousands) (unaudited) Sinclair Sinclair Guarantor Non- Eliminations Sinclair NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ 823 $ (20,655 ) $ 145,404 $ 779 $ 7,664 $ 134,015 CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES: Acquisition of property and equipment — (1,479 ) (23,239 ) (1,323 ) 190 (25,851 ) Acquisition of businesses, net of cash acquired — — (374,284 ) (10,375 ) — (384,659 ) Purchase of alarm monitoring contracts — — — (7,017 ) — (7,017 ) Investments in equity and cost method investees — (10,000 ) (47 ) (9,827 ) — (19,874 ) Loans to affiliates — (19,500 ) — — — (19,500 ) Other, net 1,197 — (210 ) 1,278 — 2,265 Net cash flows (used in) from investing activities 1,197 (30,979 ) (397,780 ) (27,264 ) 190 (454,636 ) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: Proceeds from notes payable, commercial bank financing and capital leases — 595,000 — 3,850 — 598,850 Repayments of notes payable, commercial bank financing and capital leases — (257,682 ) (461 ) (3,087 ) — (261,230 ) Dividends paid on Class A and Class B Common Stock (15,675 ) — — — — (15,675 ) Increase (decrease) in intercompany payables 15,368 (290,337 ) 262,392 20,489 (7,912 ) — Other, net (1,713 ) (5,800 ) 263 (2,580 ) 58 (9,772 ) Net cash flows (used in) from financing activities (2,020 ) 41,181 262,194 18,672 (7,854 ) 312,173 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS — (10,453 ) 9,818 (7,813 ) — (8,448 ) CASH AND CASH EQUIVALENTS, beginning of period — 115,771 235 33,966 — 149,972 CASH AND CASH EQUIVALENTS, end of period $ — $ 105,318 $ 10,053 $ 26,153 $ — $ 141,524 |