In November 2010, the FASB ratified the EITF’s amended guidance with respect to goodwill impairment. The amended  guidance requires that step two of the goodwill impairment test be performed if the carrying amount of a reporting unit is zero or  negative and it is more likely than not that a goodwill impairment exists based on any adverse qualitative factors including an  evaluation of the triggering circumstances noted in the guidance. The change is effective for fiscal years and interim changes  within those years beginning after December 15, 2010. We do not believe that this guidance will have a material impact on our  consolidated financial statements.  In December 2007, the FASB issued accounting guidance that requires the recognition of a noncontrolling interest (minority  interest) as equity in the consolidated financial statements and separate from the parent’s equity. The amount of net income  attributable to the noncontrolling interest is included in consolidated net income on the face of the statement of operations. The  new guidance was effective for financial statements issued after December 15, 2008. We applied the requirements of this  guidance retrospectively to our consolidated financial statements resulting in a change to the presentation of loss attributable to  noncontrolling interest and net income (loss) attributable to Sinclair Broadcast Group on the face of the income statement for the  year ended December 31, 2008. 2009 Retrospective Application of New Accounting Standards  In May 2008, the FASB issued new accounting guidance that requires issuers of convertible debt instruments that may be  settled in cash upon conversion to account for the liability and equity components in a manner that will reflect the entity’s  nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. Issuers were required to determine  the carrying value of just the liability portion of the debt by measuring the fair value of a similar liability (including any embedded  features other than the conversion option) that does not have an associated equity component. The excess of the initial proceeds  received from the debt issuance and the fair value of the liability component are recorded as a debt discount with the offset  recorded to equity. The discount is amortized to interest expense using the interest method over the life of a similar liability that  does not have an associated equity component. Transaction costs incurred with third parties shall be allocated between the  liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity  issuance costs, respectively, with the debt issuance costs amortized to interest expense. This guidance was effective for financial  statements issued after December 15, 2008. In 2009, we recorded the impact of this guidance retrospectively by recording  additional interest expense on our 3.0% Convertible Senior Notes, due 2027 (the 3.0% Notes) related to the amortization of the  debt discount and deferred financing costs of approximately $9.9 million for the year ended December 31, 2008. As of December  31, 2008, accumulated deficit increased, net of taxes, $8.8 million and additional paid in capital increased $17.5 million as a result  of the retrospective impact of this guidance. In addition, the adjusted net income attributable to Sinclair Broadcast Group for the  year ended December 31, 2008 decreased $5.0 million, with a resulting decrease to earnings per share of $0.06. For the year  ended December 31, 2009, the application of this new guidance increased our net loss attributable to Sinclair Broadcast Group  approximately $8.7 million and resulted in an approximate increase to loss per share of $0.11. We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash  equivalents.  In October 2009, we established a cash collateral account with the proceeds from the sale of 9.25% Senior Secured Second  Lien Notes due 2017 (the 9.25% Notes). The cash collateral account restricted the use of cash therein to repurchase the 3.0%  Notes and our 4.875% Convertible Senior Notes due 2018 (the 4.875% Notes) upon, or prior to, the expiration of the put periods  for such notes in May 2010 and January 2011, respectively. Upon expiration of such put periods, the unused cash is released to us  to be used for general corporate purposes. During 2010, we used $53.6 million of restricted cash to redeem the 3.0% and 4.875%  Notes. See  Note 5. Notes Payable and Commercial Bank Financing  for more information. As of December 31, 2010, we held $5.1  million in the restricted cash collateral account to be used for the redemption of the remaining $5.7 million aggregate principal  amount of the 4.875% Notes. As of December 31, 2010, primarily all of the restricted cash classified as current related to the  January 2011 put option. In January 2011, the put option was not exercised, however, pursuant to our Bank Credit Agreement  the cash must be used within 120 days towards reducing our overall debt balance. Cash and Cash Equivalents  Restricted Cash  Additionally, under the terms of certain lease agreements, as of December 31, 2010, we are required to hold $0.2 million of  restricted cash related to the removal of analog equipment from some of our leased towers. As of December 31, 2009, we were  required to hold $0.5 million of restricted cash related to the removal of analog tower equipment. 2010 Annual Report    35 