BLOCK COMMUNICATIONS INC - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)


x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the quarterly period ended March 31, 2003.

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to .

Commission File Number 333-96619

Block Communications, Inc.

(Exact name of registrant as specified in its charter)


Ohio		34-4374555

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

541 N. Superior Street, Toledo, Ohio 43660

(Address of principal executive offices)
(Zip code)

(419) 724-6257

(Registrant’s telephone number, including area code)

N/A

(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 shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for past 90 days. YES x NO o

Indicate by checkmark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practical date.


Voting Common Stock , (par value $.10)		Non-voting Common Stock, (par value $.10)

29,400 shares as of May 14, 2003		428,722 shares as of May 14, 2003

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION
	Financial Statements
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Income (unaudited)
		Condensed Consolidated Statement of Stockholders’ Equity (unaudited)
		Condensed Consolidated Statements of Cash Flows (unaudited)
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
	Management’s Discussion and Analysis of Financial Position and Results of Operations
	Item 4. Controls and Procedures
PART II. OTHER INFORMATION
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Certification of the Managing Director
Certification of the Chief Financial Officer
CEO Certification
CEO Certification

PART I. FINANCIAL INFORMATION

Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


		March 31		December 31
		2003		2002

		*(unaudited)*		*(note 1)*
Assets
Current assets:
	Cash and cash equivalents	$	10,991,312	$	9,781,645
	Receivables, less allowances for doubtful accounts and discounts of $3,891,000 and $3,552,000, respectively		40,283,803		45,454,639
	Recoverable income taxes		8,862,291		9,029,371
	Inventories		7,172,536		7,032,626
	Prepaid expenses		4,312,533		4,498,401
	Broadcast rights		6,008,090		6,546,678
	Deferred income taxes		9,271,000		9,271,000

Total current assets			86,901,565		91,614,360
Property, plant and equipment:
	Land and land improvements		12,284,119		12,255,696
	Buildings and leasehold improvements		41,453,371		41,483,466
	Machinery and equipment		215,985,936		215,180,502
	Cable television distribution systems and equipment		198,773,310		195,399,291
	Security alarm and video systems installation costs		6,739,848		6,591,940
	Construction in progress		17,742,064		13,777,267

			492,978,648		484,688,162
	Less allowances for depreciation and amortization		247,402,265		235,410,950

			245,576,383		249,277,212
Other assets:
	Goodwill		51,987,021		51,987,021
	Other intangibles, net of accumulated amortization		39,091,470		39,471,513
	Cash value of life insurance		26,029,039		25,594,543
	Deferred income taxes		18,859,043		16,659,000
	Pension intangibles		11,931,764		11,931,764
	Prepaid pension costs		2,460,151		2,437,798
	Deferred financing costs		11,607,638		12,099,099
	Broadcast rights, less current portion		5,342,302		6,676,317
	Other		3,400,807		3,976,050

			170,709,235		170,833,105

		$	503,187,183	$	511,724,677

PART I. FINANCIAL INFORMATION
Financial Statements


			March 31			December 31
			2003			2002

			*(unaudited)*			*(note 1)*
Liabilities and stockholders’ equity
Current liabilities:
	Accounts payable		$	10,636,374		$	13,831,059
	Salaries, wages and payroll taxes			15,912,085			19,046,005
	Workers’ compensation and medical reserves			9,008,455			8,863,918
	Other accrued liabilities			38,683,641			32,846,215
	Current maturities of long-term debt			1,085,462			4,649,871

Total current liabilities				75,326,017			79,237,068

Long-term debt, less current maturities				255,969,515			255,786,939
Other long-term obligations				143,419,103			144,113,551
Minority interest				11,901,527			11,941,238
Stockholders’ equity:
	5% Non-cumulative, non-voting Class A Stock, par value $100 a share (entitled in liquidation to $100 per share in priority over Common Stock)— 15,680 shares authorized; 12,620 shares issued and outstanding			1,262,000			1,262,000
	Common Stock, par value $.10 a share:
		Voting Common Stock—29,400 shares authorized, issued and outstanding		2,940			2,940
		Non-voting Common Stock—588,000 shares authorized; 427,786 shares issued and outstanding		42,779			42,779
	Accumulated other comprehensive loss			(22,746,874	)		(22,860,033	)
	Additional paid-in capital			771,274			771,274
	Retained earnings			37,238,902			41,426,921

				16,571,021			20,645,881

			$	503,187,183		$	511,724,677

See accompanying notes.

PART I. FINANCIAL INFORMATION
Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Income (unaudited)


		Three months ended
		March 31

		2003			2002

Revenue:
	Publishing	$	59,465,222		$	61,562,804
	Cable		26,908,577			25,096,835
	Broadcasting		9,068,231			9,000,653
	Other Communications		5,982,188			6,352,744

			101,424,218			102,013,036
Expense:
	Publishing		60,784,000			61,519,313
	Cable		24,689,294			22,813,956
	Broadcasting		9,345,026			9,055,039
	Other Communications		5,440,008			6,243,737
	Corporate general and administrative		1,079,456			951,280

			101,337,784			100,583,325

Operating income			86,434			1,429,711
Nonoperating income (expense):
	Interest expense		(4,947,372	)		(4,748,149	)
	Gain on disposition of Monroe Cablevision		—			21,600,189
	Change in fair value of interest rate swaps		(828,122	)		1,461,826
	Interest income		30,204			8,831

			(5,745,290	)		18,322,697

Income (loss) before income taxes and minority interest			(5,658,856	)		19,752,408
Provision (credit) for income taxes			(1,431,126	)		6,792,532

Income (loss) before minority interest			(4,227,730	)		12,959,876
Minority interest			39,711			(7,174	)

Net income (loss)		$	(4,188,019	)	$	12,952,702

See accompanying notes.

PART I. FINANCIAL INFORMATION
Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statement of Stockholders’ Equity (unaudited)


								Common Stock
														Accumulated
		Class A Stock				Voting				Non-Voting				Other			Additional
														Comprehensive			Paid-in		Retained
		Shares		Amount		Shares		Amount		Shares		Amount		Loss			Capital		Earnings			Total

Balances at January 1, 2003			12,620	$	1,262,000		29,400	$	2,940		427,786	$	42,779	$	(22,860,033	)	$	771,274	$	41,426,921		$	20,645,881
	Net loss																			(4,188,019	)		(4,188,019	)
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $63,500)														113,159								113,159

	Total comprehensive loss																						(4,074,860	)

Balances at March 31, 2003			12,620	$	1,262,000		29,400	$	2,940		427,786	$	42,779	$	(22,746,874	)	$	771,274	$	37,238,902		$	16,571,021


Balances at January 1, 2002			12,620	$	1,262,000		29,400	$	2,940		427,786	$	42,779	$	(4,725,589	)	$	771,274	$	40,229,696		$	37,583,100
	Net income																			12,952,702			12,952,702
	Amortization of fair value of interest rate swaps at January 1, 2001 (net of deferred tax of $63,500)														113,159								113,159

	Total comprehensive income																						13,065,861

Balances at March 31, 2002			12,620	$	1,262,000		29,400	$	2,940		427,786	$	42,779	$	(4,612,430	)	$	771,274	$	53,182,398		$	50,648,961

See accompanying notes.

PART I. FINANCIAL INFORMATION
Financial Statements

Block Communications, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (unaudited)


			Three months ended
			March 31

			2003			2002

Operating activities
Net income (loss)			$	(4,188,019	)	$	12,952,702
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation			12,461,153			11,323,191
	Amortization of intangibles and deferred charges			764,629			372,526
	Amortization of broadcast rights			1,723,413			1,573,871
	Payments for broadcast rights			(1,758,892	)		(1,179,886	)
	Gain on sale of Monroe Cablevision			—			(21,600,189	)
	Deferred income taxes (credit)			(2,263,543	)		3,260,301
	Provision for bad debts			138,738			220,876
	Minority interest			(39,711	)		7,174
	Change in fair value of interest rate swaps			828,122			(1,461,826	)
	Loss on disposal of property and equipment			39,462			396,866
	Changes in operating assets and liabilities:
		Receivables		5,032,098			5,093,222
		Inventories		(139,910	)		(891,359	)
		Prepaid expenses		185,868			(71,640	)
		Accounts payable		(3,194,685	)		(1,862,245	)
		Salaries, wages, payroll taxes and other accrued liabilities		1,465,153			(4,261,833	)
		Other assets		1,301,960			4,023,251
		Postretirement benefits and other long-term obligations		1,942,396			2,457,531

Net cash provided by operating activities				14,298,232			10,352,533

Investing activities
Additions to property, plant and equipment				(8,812,985	)		(5,862,022	)
Change in cash value of life insurance				(434,496	)		(413,886	)
Proceeds from sale of Monroe Cablevision				—			12,059,115
Proceeds from disposal of property and equipment				—			3,247

Net cash provided by (used in) investing activities				(9,247,481	)		5,786,454

Financing activities
Payments on term loan				(3,758,500	)		—
Payments on long-term revolver				—			(19,000,000	)
Net borrowings on short-term revolver				—			639,126
Payments on notes payable and capital leases				(82,584	)		(91,462	)

Net cash used in financing activities				(3,841,084	)		(18,452,336	)

Increase (decrease) in cash and cash equivalents				1,209,667			(2,313,349	)
Cash and cash equivalents at beginning of period				9,781,645			5,882,732

Cash and cash equivalents at end of period			$	10,991,312		$	3,569,383

Non-cash borrowings for equipment under capital lease			$	—		$	857,550

See accompanying notes.

PART I. FINANCIAL INFORMATION
Financial Statements

BLOCK COMMUNICATIONS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1—BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Block Communications, Inc. (the Company) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. For further information, refer to the December 31, 2002 audited consolidated financial statements and footnotes thereto.

The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

New Accounting Standards

In June 2001, SFAS No. 143, Accounting for Asset Retirement Obligations, was issued and is effective for fiscal years beginning after June 15, 2002. The pronouncement requires legal obligations associated with the retirement of long-lived assets to be recognized at their fair value at the time that the obligations are incurred. Upon initial recognition of a liability, that cost should be capitalized as part of the related long-lived asset and allocated to expense over the estimated useful life of the asset. The adoption of this standard on January 1, 2003 has had no impact on the Company’s financial position or results of operations for the three months ended March 31, 2003.

In July 2002, SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, was issued and applies to fiscal years beginning after December 31, 2002. SFAS No. 146 requires certain costs associated with a restructuring, discontinued operation or plant closing to be recognized as incurred rather that at the date of commitment to an exit or disposal plan. The adoption of this standard on January 1, 2003 has had no impact on the Company’s financial position or results of operations for the three months ended March 31, 2003.

In December 2002, SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, was issued and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has previously adopted the fair value method of accounting for stock-based employee compensation therefore all years presented reflect this method and no pro-forma disclosures are required.

NOTE 2—ACQUISITION

Effective March 29, 2002, the Company consummated an asset exchange agreement with Comcast Corporation which resulted in an exchange of 100% of the assets of Monroe Cablevision for 100% of the assets of Comcast’s Bedford, Michigan operations and $12.1 million cash. The Company recorded a $21.1 million gain on the disposition of Monroe Cablevision resulting from the difference in fair value versus the net book value of assets exchanged. For tax reporting, the transaction has been treated as a like kind exchange and the amount of the gain in excess of the cash received has been deferred. The operations of Monroe Cablevision are included in the Company’s financial statements through March 28, 2002.

The net assets of the acquired Bedford system have been recorded at their fair value and relate primarily to the cable distribution system and intangibles. The operations of the Bedford system have been included in the Company’s financial statements since March 29, 2002.

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 3—LONG-TERM DEBT

Long-term debt consists of the following:


	March 31,		December 31,
	2003		2002

Subordinated notes	$	175,000,000	$	175,000,000
Senior term loan		70,866,500		74,625,000
Capital leases		3,070,511		3,153,095
Fair value adjustment of subordinated notes		8,117,966		7,658,715

		257,054,977		260,436,810
Current maturities		1,085,462		4,649,871

	$	255,969,515	$	255,786,939

NOTE 4—OTHER LONG-TERM OBLIGATIONS

Other long-term obligations consist of the following:


	March 31,		December 31,
	2003		2002

Other postretirement benefits	$	84,137,872	$	83,365,000
Pension liabilities		37,105,622		36,171,121
Deferred compensation obligations		14,703,686		14,360,574
Broadcast rights payable		5,027,204		7,330,489
Other		2,444,719		2,886,367

	$	143,419,103	$	144,113,551

NOTE 5—BUSINESS SEGMENT INFORMATION

The Company has three reportable segments—publishing, cable and broadcasting. The publishing segment operates two daily newspapers located in Ohio and Pennsylvania. The cable segment includes two cablevision companies located in Ohio. The broadcasting segment has five television stations located in Idaho, Illinois, Indiana, Kentucky, and Ohio. The “Other” category includes non-reportable segments and corporate items. The non-reportable segments provide services such as telephony, security systems and monitoring, cable plant construction and distributed advertising services. The following table presents certain financial information for the three reportable segments and the other category.

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 5—BUSINESS SEGMENT INFORMATION (continued)


		Three months ended
		March 31

		2003			2002

Revenues:
	Publishing	$	60,325,059		$	62,253,335
	Intersegment		859,837			690,531

	External Publishing		59,465,222			61,562,804

	Cable		26,931,360			25,096,835
	Intersegment		22,783			—

	External Cable		26,908,577			25,096,835

	Broadcasting		9,068,231			9,000,653
	Other		5,982,188			6,352,744

			101,424,218			102,013,036
Operating income (loss):
	Publishing		(516,620	)		690,357
	Intersegment		802,158			646,866

	Net Publishing		(1,318,778	)		43,491

	Cable		1,365,850			1,601,490
	Intersegment		(853,433	)		(681,389	)

	Net Cable		2,219,283			2,282,879

	Broadcasting		(276,795	)		(54,386	)
	Corporate expenses		(1,079,456	)		(951,280	)
	Other		542,180			109,007

			86,434			1,429,711

Nonoperating income (expense)			(5,745,290	)		18,322,697

Income (loss) before income taxes and minority interest		$	(5,658,856	)	$	19,752,408

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION

The Company’s credit facilities are guaranteed jointly and severally by all of the Company’s wholly owned subsidiaries (collectively, the Guarantors). Such guarantees are full and unconditional. WAND (TV) Partnership, a partially owned subsidiary of the Company, is not a guarantor of the credit facilities.

Supplemental consolidating financial information of the Company, specifically including such information for the Guarantors, is presented below. Financial information for the Parent Company includes both the Holding Company and its one division, The Toledo Blade Company. Investments in subsidiaries are presented using the cost method of accounting and eliminated. Separate financial statements of the Guarantors are not provided as the consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of assets held and the operations of the combined groups.

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED BALANCE SHEET
March 31, 2003


	Unconsolidated

	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated

Assets:
Current assets	$	30,006,573		$	54,161,689	$	2,044,409	$	688,894		$	86,901,565
Property, plant and equipment, net		26,042,449			213,235,943		5,909,898		388,093			245,576,383
Intangibles, net		4,391,698			58,419,346		28,068,958		198,489			91,078,491
Cash value of life insurance		25,803,961			225,078		—		—			26,029,039
Prepaid pension costs		—			2,460,151		—		—			2,460,151
Pension intangibles		1,442,550			10,489,214		—		—			11,931,764
Investments in subsidiaries		170,723,363			—		—		(170,723,363	)		—
Other		20,238,957			18,970,833		—		—			39,209,790

	$	278,649,551		$	357,962,254	$	36,023,265	$	(169,447,887	)	$	503,187,183

Liabilities and stockholders’ equity:
Current liabilities	$	20,796,886		$	53,141,803	$	699,347	$	687,981		$	75,326,017
Long-term debt		255,969,515			—		—		—			255,969,515
Other long-term obligations		10,745,610			230,566,736		—		(97,893,243	)		143,419,103
Minority interest		—			—		—		11,901,527			11,901,527
Stockholders’ equity		(8,862,460	)		74,253,715		35,323,918		(84,144,152	)		16,571,021

	$	278,649,551		$	357,962,254	$	36,023,265	$	(169,447,887	)	$	503,187,183

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED BALANCE SHEET
December 31, 2002


	Unconsolidated

	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated

Assets:
Current assets	$	31,824,209		$	57,565,103	$	2,136,861	$	88,187		$	91,614,360
Property, plant and equipment, net		26,920,217			215,990,124		5,994,444		372,427			249,277,212
Intangibles, net		4,494,448			58,696,639		28,068,958		198,489			91,458,534
Cash value of life insurance, net		25,369,465			225,078		—		—			25,594,543
Prepaid pension costs		—			2,437,798		—		—			2,437,798
Pension intangibles		1,442,550			10,489,214		—		—			11,931,764
Investments in subsidiaries		178,302,804			—		—		(178,302,804	)		—
Other		18,618,079			20,792,387		—		—			39,410,466

	$	286,971,772		$	366,196,343	$	36,200,263	$	(177,643,701	)	$	511,724,677

Liabilities and stockholders’ equity:
Current liabilities	$	23,530,460		$	54,864,676	$	756,010	$	85,922		$	79,237,068
Long-term debt		255,786,939			—		—		—			255,786,939
Other long-term obligations		11,310,112			238,274,771		—		(105,471,332	)		144,113,551
Minority interest		—			—		—		11,941,238			11,941,238
Stockholders’ equity		(3,655,739	)		73,056,896		35,444,253		(84,199,529	)		20,645,881

	$	286,971,772		$	366,196,343	$	36,200,263	$	(177,643,701	)	$	511,724,677

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
Three Months Ended March 31, 2003


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Revenue	$	19,651,046		$	83,061,202		$	1,489,056		$	(2,777,086	)	$	101,424,218
Expenses		21,170,272			81,350,448			1,609,816			(2,792,752	)		101,337,784

Operating income (loss)		(1,519,226	)		1,710,754			(120,760	)		15,666			86,434
Nonoperating income (expense)		(5,745,098	)		(617	)		425			—			(5,745,290	)

Income (loss) before income taxes and minority interest		(7,264,324	)		1,710,137			(120,335	)		15,666			(5,658,856	)
Provision (credit) for income taxes		(1,944,444	)		513,318			—			—			(1,431,126	)

Income (loss) before minority interest		(5,319,880	)		1,196,819			(120,335	)		15,666			(4,227,730	)
Minority interest		—			—			—			39,711			39,711

Net income (loss)	$	(5,319,880	)	$	1,196,819		$	(120,335	)	$	55,377		$	(4,188,019	)

CONSOLIDATING CONDENSED STATEMENT OF INCOME
Three Months Ended March 31, 2002


	Unconsolidated

	Parent			Guarantor		Non-Guarantor
	Company			Subsidiaries		Subsidiary		Eliminations			Consolidated

Revenue	$	19,069,026		$	83,275,369	$	1,812,798	$	(2,144,157	)	$	102,013,036
Expenses		20,857,528			80,579,846		1,647,608		(2,501,657	)		100,583,325

Operating income (loss)		(1,788,502	)		2,695,523		165,190		357,500			1,429,711
Nonoperating income		18,316,482			2,208		4,007		—			18,322,697

Income before income taxes and minority interest		16,527,980			2,697,731		169,197		357,500			19,752,408
Provision for income taxes		5,778,662			1,013,870		—		—			6,792,532

Income before minority interest		10,749,318			1,683,861		169,197		357,500			12,959,876
Minority interest		—			—		—		(7,174	)		(7,174	)

Net income	$	10,749,318		$	1,683,861	$	169,197	$	350,326		$	12,952,702

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
Three months ended March 31, 2003


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Net cash provided by (used in) operating activities	$	(1,637,248	)	$	15,404,867		$	513,595		$	17,018		$	14,298,232
Additions to property, plant and equipment		(163,232	)		(8,444,953	)		(189,134	)		(15,666	)		(8,812,985	)
Other investing activities		(434,496	)		—			—			—			(434,496	)

Net cash used in investing activities		(597,728	)		(8,444,953	)		(189,134	)		(15,666	)		(9,247,481	)
Payments on term loan		(3,758,500	)		—			—			—			(3,758,500	)
Other financing activity		6,533,798			(6,615,030	)		—			(1,352	)		(82,584	)

Net cash provided by (used in) financing activities		2,775,298			(6,615,030	)		—			(1,352	)		(3,841,084	)

Increase in cash and equivalents		540,322			344,884			324,461			—			1,209,667
Cash and equivalents at beginning of period		8,854,800			455,633			471,212			—			9,781,645

Cash and equivalents at end of period	$	9,395,122		$	800,517		$	795,673		$	—		$	10,991,312

PART I. FINANCIAL INFORMATION
Financial Statements

NOTE 6—SUPPLEMENTAL GUARANTOR INFORMATION (continued)

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
Three months ended March 31, 2002


	Unconsolidated

	Parent			Guarantor			Non-Guarantor
	Company			Subsidiaries			Subsidiary			Eliminations			Consolidated

Net cash provided by (used in) operating activities	$	5,854,988		$	5,384,759		$	(1,244,714	)	$	357,500		$	10,352,533
Additions to property, plant and equipment		(77,790	)		(5,261,452	)		(165,280	)		(357,500	)		(5,862,022	)
Other investing activities		11,645,229			3,247			—			—			11,648,476

Net cash provided by (used in) investing activities		11,567,439			(5,258,205	)		(165,280	)		(357,500	)		5,786,454
Payments on long-term revolver		(18,360,874	)		—			—			—			(18,360,874	)
Other financing activity		(91,462	)		—			—			—			(91,462	)

Net cash provided by financing activities		(18,452,336	)		—			—			—			(18,452,336	)

Increase (decrease) in cash and equivalents		(1,029,909	)		126,554			(1,409,994	)		—			(2,313,349	)
Cash and equivalents at beginning of period		3,186,078			(64,937	)		2,761,591			—			5,882,732

Cash and equivalents at end of period	$	2,156,169		$	61,617		$	1,351,597		$	—		$	3,569,383

PART I. FINANCIAL INFORMATION

Management’s Discussion and Analysis of Financial Position and Results of Operations

The following analysis of the financial condition and results of operations of Block Communications, Inc. (the “Company”) should be read in conjunction with our unaudited Consolidated Condensed Financial Statements and notes thereto included elsewhere herein and with the management’s discussion and analysis, consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

Overview

We are a privately held diversified media company with our primary operations in cable television, newspaper publishing and television broadcasting. We provide cable television service to the greater Toledo, Ohio metropolitan area (Buckeye CableSystem) and the Sandusky, Ohio area (Erie County CableSystem). At March 31, 2003, we had approximately 152,000 subscribers. We publish two daily metropolitan newspapers, the Pittsburgh Post-Gazette in Pittsburgh, Pennsylvania, and The Blade in Toledo, Ohio, each of which is the leading publication in its market. The aggregate average daily and Sunday paid circulation of our two newspapers is approximately 386,000 and 595,700, respectively. We own and operate four television stations: two in Louisville, Kentucky, and one each in Boise, Idaho and Lima, Ohio; and we are a two-thirds owner of a television station in Decatur, Illinois. We also have other communication operations including a small telephony business, a home security business and an alternative distribution advertising business.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. We base our estimates and judgments on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. We evaluate these estimates and judgments on a continual basis. Actual results may differ from these estimates and judgments.

We believe the following critical accounting policies affect our significant estimates and judgments used in the preparation of the consolidated financial statements. We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. If the financial condition of our customers were to change, resulting in an impairment of their ability to make payments, additional allowances could be required. We maintain various employment related liabilities, such as workers’ compensation and medical reserves, based on historical performance and current trends. Actual results could differ from estimates resulting in adjustments to the recorded liability. Actuarial assumptions have a significant impact on the determination of net periodic pension costs and credits and other post-employment benefits. If actual experience differs from these assumptions, future periodic pension and post-employment costs could be adversely affected.

General

For the three months ended March 31, 2003, we had revenues, operating income and a net loss of $101.4 million, $86,000 and $4.2 million, respectively. This represents decreases in revenues and operating income as compared to the quarter ended March 31, 2002 of $589,000 and $1.3 million, respectively. Advertising revenues are generally highest in the fourth quarter, due in part to increases in retail advertising in the period leading up to and including the holiday season. In addition, broadcasting advertising revenues are generally higher in even-numbered election years due to political advertising. Advertising revenues in the markets we operate were soft throughout the first quarter of 2003 due primarily to economic uncertainties resulting from, among other things, geopolitical concerns.

Set forth below are the operating results and a reconciliation of net income to EBITDA for the three months ended March 31, 2003 and 2002.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Block Communications, Inc. and Subsidiaries
Results of Operations


		Three months ended March 31,

		2003					2002

Revenue:
	Publishing	$	59,465,222		58.6	%	$	61,562,804		60.3	%
	Cable		26,908,577		26.5			25,096,835		24.6
	Broadcasting		9,068,231		8.9			9,000,653		8.8
	Other Communications		5,982,188		5.9			6,352,744		6.2
			101,424,218		100.0			102,013,036		100.0

Expense:
	Publishing		60,784,000		59.9			61,519,313		60.3
	Cable		24,689,294		24.3			22,813,956		22.4
	Broadcasting		9,345,026		9.2			9,055,039		8.9
	Other Communications		5,440,008		5.4			6,243,737		6.1
	Corporate general and administrative		1,079,456		1.1			951,280		0.9
			101,337,784		99.9			100,583,325		98.6

Operating income			86,434		0.1	%		1,429,711		1.4	%

Nonoperating income (expense):
	Interest expense		(4,947,372	)				(4,748,149	)
	Gain on disposition of Monroe Cablevision		—					21,600,189
	Change in fair value of interest rate swaps		(828,122	)				1,461,826
	Interest income		30,204					8,831
			(5,745,290	)				18,322,697

Income (loss) before income taxes and minority interest			(5,658,856	)				19,752,408
Provision (credit) for income taxes			(1,431,126	)				6,792,532
Minority interest			39,711					(7,174	)

Net income (loss)		$	(4,188,019	)			$	12,952,702

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Set forth below is a reconciliation of net income (loss) to EBITDA by operating segment for the three months ended March 31, 2003 and 2002.

Block Communications, Inc. and Subsidiaries
Reconciliation of Net Income (Loss) to EBITDA by Segment


		Publishing			Cable			Broadcasting			Other			Corporate			Consolidated

		Three months ended March 31, 2003
Net Income (Loss)		$	(1,166,437	)	$	1,548,219		$	(173,828	)	$	605,576		$	(5,001,549	)	$	(4,188,019	)
Adjustments to Net Income (Loss):
	Interest expense		48,607			—			—			—			4,898,765			4,947,372
	Provision (credit) for income taxes		(200,915	)		672,195			(62,831	)		(63,396	)		(1,776,179	)		(1,431,126	)
	Depreciation		2,865,999			7,828,085			698,732			1,068,337			—			12,461,153
	Amortization of intangibles and deferred charges		88,167			184,891			4,235			—			487,336			764,629
	Amortization of broadcast rights		—			79,677			1,643,736			—			—			1,723,413
	Film payments		—			(99,207	)		(1,659,685	)		—			—			(1,758,892	)
	Loss on disposal of assets		—			39,389			—			73			—			39,462
	Change in fair value of derivative		—			—			—			—			828,122			828,122

EBITDA		$	1,635,421		$	10,253,249		$	450,359		$	1,610,590		$	(563,505	)	$	13,386,114


		Three months ended March 31, 2002
Net Income (Loss)		$	(222,305	)	$	1,590,706		$	(204,552	)	$	323,712		$	11,465,141		$	12,952,702
Adjustments to Net Income (Loss):
	Interest expense		37,228			—			—			—			4,710,921			4,748,149
	Provision (credit) for income taxes		228,609			693,923			147,457			(214,705	)		5,937,248			6,792,532
	Depreciation		2,976,000			6,697,891			643,753			1,005,547			—			11,323,191
	Amortization of intangibles and deferred charges		94,418			—			7,710			—			270,398			372,526
	Amortization of broadcast rights		—			71,510			1,502,361			—			—			1,573,871
	Film payments		—			(69,111	)		(1,110,775	)		—			—			(1,179,886	)
	Loss on disposal of assets		950			390,281			—			5,635			—			396,866
	Change in fair value of derivative		—			—			—			—			(1,461,826	)		(1,461,826	)
	Gain on sale of Monroe Cablevision		—			—			—			—			(21,600,189	)		(21,600,189	)

EBITDA		$	3,114,900		$	9,375,200		$	985,954		$	1,120,189		$	(678,307	)	$	13,917,936

We define EBITDA as net income before interest expense, provision for income taxes, depreciation and amortization (including amortization of broadcast rights), other non-cash charges, gains or losses on disposition of assets, other non-recurring items, and extraordinary items and after payments for broadcast rights. Other media companies may measure EBITDA in a different manner. We have included EBITDA data because such data is commonly used as a measure of performance for media companies and is also used by investors to measure a company’s ability to service debt. EBITDA is also a significant component of the financial covenants contained in our senior debt agreements. EBITDA is not, and should not be used as, an indicator of or alternative to operating income (loss), net income (loss) or cash flow as reflected in our consolidated financial statements, is not intended to represent funds available for debt service, dividends or other discretionary uses, is not a measure of financial performance under accounting principles generally accepted in the United States, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. Refer to our financial statements which appear elsewhere in this report. The foregoing calculations of EBITDA are not necessarily comparable to similarly titled amounts of other companies.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

Revenues

Total revenues for the three month period ended March 31, 2003 decreased $589,000, or 0.6%, as compared to the same period of the prior year, to $101.4 million. This decrease was attributable to reduced publishing advertising revenue, partially offset by increases in cable and telecom operations as discussed below.

Cable Television. Cable revenue for the quarter was $26.9 million, an increase of $1.8 million, or 7.2%, as compared to the same period of 2002. The increase in cable revenue was principally the result of an increase of $5.02, to $58.93, in the average monthly revenue per basic subscriber, based on the average number of subscribers throughout the period. An increase in the monthly basic cable service charge and continued rollout of new services drove the increase in average monthly revenue per subscriber. Average monthly high-speed data revenue per customer of $45.64 decreased $.91 as compared to the first quarter of 2002. This decrease is primarily due to digital packaging discounts offered as part of the aggressive digital marketing campaign launched during the third quarter of 2002. Average monthly digital revenue per home of $14.90 for the quarter ended March 31, 2003 decreased $1.82 as compared to the quarter ending March 31, 2002. This decrease is due to a shift in subscriber base from high-end early adopters to mainstream digital subscribers. This shift in the subscriber base is a result of the aggressive marketing campaign mentioned above.

Revenue generating units increased in the digital and high-speed data categories during the quarter ended March 31, 2003. Net digital additions totaled 4,768 during the quarter, resulting in 30,860 digital homes as of March 31, 2003. Net high-speed data additions totaled 1,941 during the quarter, resulting in 24,506 high-speed data customers as of March 31, 2003. Year over year, the increase in digital and high-speed data subscribers equaled 21,019 and 7,078, respectively. Basic subscribers at the end of the period totaled 152,040, a decrease of 994 basic subscribers from the prior year. This is primarily due to the decrease of 727 basic subscribers of our non-rebuilt Erie County system, due to the growth in DBS penetration. The rebuild of Erie County began in the first quarter of 2003, with an expected completion date of the first quarter of 2004. Basic subscribers decreased 352 during the quarter ended March 31, 2003, with Erie County recognizing a decrease of 372 subscribers offset by minimal growth in Buckeye Cablesystem’s basic subscribers.

Newspaper Publishing. Publishing revenue was $59.5 million, a decrease of $2.1 million, or 3.4%, as compared to the first quarter of 2002. The decrease consisted of a $2.0 million, or 4.1%, decrease in advertising revenue due primarily to a decrease in retail and classified advertising of $1.2 million, or 5.0%, and $1.1 million, or 5.7%, respectively, resulting from continued economic softness due in part to concerns over the war with Iraq. These decreases were partially offset by an increase in national advertising of $330,000, or 5.0%. For the first quarter of 2003, circulation revenue and other revenue, which consists of third party delivery and total market coverage, were consistent with the same quarter of the previous year.

Television Broadcasting. Broadcasting revenue was $9.1 million, an increase of $68,000, or 0.8%, as compared to the three months ended March 31, 2002. The increase in broadcasting revenue was due to an increase in local advertising revenue of $271,000, or 4.8%, an increase in national and regional advertising of $182,000, or 4.4%, offset by a decrease in political advertising of $373,000.

Other Communications. Other communications revenue was $6.0 million, a decrease of $371,000, or 5.8%, as compared to same period of the prior year. This is partially due to a decrease in our security system sales revenue of $576,000, resulting from a planned reduction in the growth of our security business with the intent of improving operating margins and controlling capital investments. Other communications revenue also reflects an increase in telecom switched services revenue of $435,000, offset by a decrease in long-distance revenue of $172,000. During the first quarter of 2003, the telecom switched services revenue increased due to the addition of 35 unique telecom customers, representing a 6.1% increase in the customer base.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Operating Expenses

Operating expenses for the quarter were $101.3 million, an increase of $754,000, or 0.8%, as compared to the first quarter of 2002. The increase in operating expenses was attributable to increased cable and broadcasting expenses, offset by decreased publishing and other communications expenses.

Cable Television. Cable operating expenses were $24.7 million, an increase of $1.9 million, or 8.2%, as compared to the same period of the prior year. The increase was primarily due to a $1.1 million, or 16.9%, increase in depreciation, to $7.8 million. This increase in depreciation is attributable to the capital expenditures associated with the rebuild of our Toledo cable system and continued rollout of cable modems and digital cable service. In addition, depreciation expense for the Erie County system has been accelerated in anticipation of a first quarter 2004 rebuild completion date. Basic cable programming expenses increased $355,000, or 6.3%, to $6.0 million, due to price increases from programming suppliers. Programming expense for the digital tier increased $243,000, due to an increase in the number of digital subscribers as compared to the same quarter of the prior year.

Newspaper Publishing. Publishing operating expenses were $60.8 million, a decrease of $735,000, or 1.2%, from the three months ended March 31, 2002. The decrease was primarily due to a $546,000, or 7.2%, decrease in newsprint and ink expense, resulting from a weighted-average price per ton decrease of $24.09, or 2.1%, and a 3.6% decrease in consumption from the same period of the prior year. Additional savings resulted from overall cost controls.

Television Broadcasting. Broadcasting operating expenses were $9.3 million, an increase of $290,000, or 3.2%, from the same period of the prior year. The increase results primarily from increases in programming and broadcast film amortization expense of $153,000 and $141,000, respectively.

Other Communications. Other communications operating expenses were $5.4 million, a decrease of $804,000, or 12.9%, from the same period of 2002. This variance is primarily due to a decrease of $561,000, or 25.6% in operating expenses related to security alarm system sales and monitoring caused by a decrease in sales volumes, as well as by cost control initiatives. Telecom operating expenses decreased $156,000, or 4.1%, due primarily to a decrease of $120,000 in long-distance expense.

Operating Income

Operating income decreased $1.3 million as compared to the three months ended March 31, 2002. Cable operating income decreased $64,000 due to increases in depreciation and basic cable programming expenses, partially offset by revenue growth generated from rate increases and rollout of new services. Publishing operating income decreased $1.4 million, primarily due to decreases in advertising revenue, partially offset by newsprint savings and the implementation of an overall expense reduction program. Broadcasting operating income decreased $222,000 due to substantially flat advertising revenue and increases in overall programming expenses. Other communications operating income increased $433,000 due to revenue growth from increased telecom sales and decreased operating expenses. Corporate general and administrative expenses increased $128,000 from the prior year due to increases in salary expense, professional fees, and amortization of deferred financing costs.

Net Income

For the three months ended March 31, 2003, the company reported a net loss of $4.2 million, compared to net income of $13.0 million reported for the same period of the prior year. The decrease in net income is due to the decrease in operating income, a $2.3 million increase in the expense attributable to the change in fair value of interest rate swaps, and a $21.6 million gain recognized in the first quarter of 2002 attributable to the like-kind exchange of Monroe Cablevision, partially offset by a decrease in interest expense and provision for income taxes of $199,000 and $8.2 million, respectively. The provision for income taxes decreased due to the tax effect of the gain on the like-kind exchange recognized in the first quarter of 2002.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Depreciation and Amortization

Depreciation and amortization of intangibles and deferred charges increased $1.5 million, or 13.1%, as compared to the same period of the prior year. The increase was primarily due to asset additions resulting from the rebuild of our cable system in Toledo, accelerated depreciation expense on the Erie County system, intangible amortization recognized due to the like-kind exchange of Monroe Cablevision and other capital expenditures to maintain operating assets.

EBITDA

EBITDA decreased $532,000, or 3.8%, as compared to the three months ended March 31, 2002. A reconciliation of EBITDA to net income is provided above. EBITDA as a percentage of revenue decreased to 13.2% in the three months ended March 31, 2003, from 13.6% in the same period of the prior year. The decrease in EBITDA as a percentage of revenue was primarily due to the reduction in publishing advertising revenues resulting from economic conditions in the first quarter of 2003, offset by the continued rollout of high margin advanced cable products, the increase in cable service charges and lower newsprint prices. Net loss as a percentage of revenue was 4.1% as of March 31, 2003, as compared to net income as a percentage of revenue at March 31, 2002 of 12.7%. As discussed above, the first quarter of 2002 included a $13.5 million gain, net of taxes, related to the like-kind exchange.

Liquidity and Capital Resources

Historically, our primary sources of liquidity have been cash flow from operations and borrowings under our senior credit facilities. The need for liquidity arises primarily from capital expenditures and interest payable on the senior subordinated notes and the senior credit facility.

Net cash provided by operating activities was $14.3 million and $10.4 million for the three months ended March 31, 2003 and March 31, 2002, respectively. The net cash provided by operating activities is determined by adding back depreciation and amortization, and adjusting for other non-cash items. Cash used in investing activities was $9.2 million for the three months ended March 31, 2003, compared to cash provided by investing activities of $5.8 million from the same period of the prior year. Cash provided by investing activities in the first quarter of 2002 includes $12.1 million of proceeds from the sale of Monroe Cablevision.

Our capital expenditures have historically been financed with cash flow from operations and borrowings under our senior credit facility. We made capital expenditures of $8.8 million and $6.7 million, including capital leases, for the three months ended March 31, 2003 and March 31, 2002, respectively. Capital expenditures for the three months ended March 31, 2003 were used primarily to begin the rebuild of the Erie County Cable system, continue the rebuild of the system acquired from Comcast in the like-kind exchange and maintain other operating assets. We expect to make capital expenditures of $62.4 million in the last three quarters of 2003. These include the continued rollout of advanced cable services, continued rebuild of the Erie County cable system, commencement of the Post-Gazette production facility upgrade project and various other improvements to the publishing and broadcasting facilities.

Financing activities used $3.8 million of cash for the three months ended March 31, 2003, compared to $18.5 million from the same period of the prior year. The cash used in the first quarter of 2003 includes a $3.6 million mandatory pre-payment on the senior credit facilities due to $7.1 million of excess cash flow generated during the year ended December 31, 2002. During the first quarter of 2002, we made $19.0 million in optional pre-payments on our long-term revolving credit agreements. At March 31, 2003, the balances outstanding and available under our new senior credit facilities and subordinated notes were $245.9 million and $111.5 million, respectively, and the interest rate on the balance outstanding was 8.21%. At March 31, 2002, the balances outstanding and available under our previous senior credit facility and senior notes were $216.6 million and $57.0 million, respectively, and the interest rate on the balance outstanding was 9.0%. The increase in the amount outstanding, offset by a decrease in the effective interest rate generated an increase in interest expense of $199,000, or 4.2%.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

In April 2002, we issued $175 million of 9-1/4% senior subordinated notes. The proceeds were used to repay our existing senior term loan and senior notes and to prepay a portion of our existing senior revolving credit facility. In May 2002, we entered into new senior credit facilities totaling $200.0 million. The proceeds were used to refinance the remaining balance of the existing senior revolving credit facility and capital expenditures. The new senior credit facilities are guaranteed by substantially all of our present and future domestic subsidiaries and are collateralized by a pledge of substantially all of our and the guarantor subsidiaries’ material assets.

We believe that funds generated from operations and the borrowing availability under our new senior credit facilities will be sufficient to finance our current operations, our cash obligations in connection with the planned capital expenditures, and our current and future financial obligations.

Quantitative and Qualitative Disclosure About Market Risk

Our revolving credit and term loan agreements bear interest at floating rates. Accordingly, we are exposed to potential losses related to changes in interest rates. We do not enter into derivatives or other financial instruments for trading or speculative purposes; however, in order to manage our exposure to interest rate risk, we have entered into interest rate swaps. As of March 31, 2003, our interest rate swap agreements expire in varying amounts through April 2009.

The fair market value of $70.9 million of our long-term debt approximates its carrying value as it bears interest at floating rates. As of March 31, 2003, the estimated fair value of our interest rate swap agreements was $701,000, which represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. These are reflected in our financial statements as other non-current assets. Changes in the fair value of derivative financial instruments are recognized either in income or as an adjustment to the carrying value of the underlying debt depending on whether the derivative financial instruments qualify for hedge accounting. The carrying value of our 9-1/4% senior subordinated notes was $183.1 million, as adjusted for the fair value hedge, at March 31, 2003.

As of March 31, 2003, we had entered into interest rate swaps that approximated $221.0 million, or 89.9%, of our borrowings under all of our credit facilities. The interest rate swaps consist of $121.0 million relating to our revolving credit and term loan agreements, and $100.0 million principal amount of the senior subordinated notes. In addition, we had entered into an interest rate swap agreement that has the economic effect of substantially offsetting $55.0 million of the swap agreements totaling $121.0 million. In the event of an increase in market interest rates, the change in interest expense would be dependent upon the weighted average outstanding borrowings and derivative instruments in effect during the reporting period following the increase. Based on our current outstanding borrowings and interest rate swap agreements, our exposure to interest rate risk is not material. A hypothetical 100 basis point increase in interest rates along the entire interest rate yield curve would increase our annual interest expense by approximately $49,000.

Recent Accounting Pronouncements

In December 2002, SFAS No. 148, Accounting for Stock-Based Compensation—Transition and Disclosure, was issued and provides alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has previously adopted the fair value method of accounting for stock-based employee compensation; therefore all years presented reflect this method and no pro-forma disclosures are required.

PART I. FINANCIAL INFORMATION
Management’s Discussion and Analysis of Financial Position and Results of Operations

Forward-Looking Statements

Certain statements contained herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from expectations contained in such statements.

Factors that may materially affect our future financial condition and results of operations, as well as any forward-looking statements, include economic and market conditions and many other factors beyond our control. For an additional discussion of risk factors relating to our future financial condition and results of operations, reference is made to the discussion under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002.

PART I. FINANCIAL INFORMATION

Item 4. Controls and Procedures

The Managing Director and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including the Managing Director and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation.

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit 99.1 Certification of the Managing Director pursuant to 18 U.S.C. Sec. 1350.

Exhibit 99.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.

(b) No reports on Form 8-K were filed during the quarter ended March 31, 2003.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	BLOCK COMMUNICATIONS, INC. (Registrant)

Date: May 14, 2003	By:	/s/ Allan Block

		Allan Block Managing Director

Date: May 14, 2003	By:	/s/ Gary J. Blair

		Gary J. Blair Executive Vice President/Chief Financial Officer

Certification of the Managing Director

I, Allan Block, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Block Communications, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a. designed such disclosure controls and procedures 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 quarterly report is being prepared;

b. evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


/s/ Allan Block

Name: Allan Block Title: Managing Director Date: 5/14/03

Certification of the Chief Financial Officer

I, Gary Blair, certify that:


/s/ Gary J. Blair

Name: Gary J. Blair Title: Executive Vice-President/Chief Financial Officer Date: 5/14/03

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	Exhibit 99.1 Certification of the Managing Director pursuant to 18 U.S.C. Sec. 1350.

	Exhibit 99.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Sec. 1350.

1.		I have reviewed this quarterly report on Form 10-Q of Block Communications, Inc.;

2.		Based on my knowledge, this quarterly 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 quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.		The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

	a.		designed such disclosure controls and procedures 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 quarterly report is being prepared;

	b.		evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

	c.		presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

	a.		all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

	b.		any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and