LIN TELEVISION CORP - 10-Q Quarterly Report

UNITED STATES OF AMERICA

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


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

		For the quarterly period ended September 30, 2004


Commission file number: 001-31311		Commission file number: 000-25206
LIN TV Corp.		LIN Television Corporation
(Exact name of registrant as specified in its charter)		(Exact name of registrant as specified in its charter)

Delaware		Delaware
(State or other jurisdiction of incorporation or organization)		(State or other jurisdiction of incorporation or organization)

05-0501252		13-3581627
(I.R.S. Employer Identification No.)		(I.R.S. Employer Identification No.)

Four Richmond Square, Suite 200, Providence, Rhode Island 02906

(Address of principal executive offices)

(401) 454-2880

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

This combined Form 10-Q is separately filed by (i) LIN TV Corp. and (ii) LIN Television Corporation. LIN Television Corporation meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this form with the reduced disclosure format permitted by such instruction.

LIN TV Corp. Class A common stock, $0.01 par value, issued and outstanding at November 1, 2004: 26,896,888 shares.

LIN TV Corp. Class B common stock, $0.01 par value, issued and outstanding at November 1, 2004: 23,508,119 shares.

LIN TV Corp. Class C common stock, $0.01 par value, issued and outstanding at November 1, 2004: 2 shares.

LIN Television Corporation common stock, $0.01 par value, issued and outstanding at November 1, 2004: 1,000 shares.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
		LIN TV Corp.
		Condensed Consolidated Balance Sheets	2
		Condensed Consolidated Statements of Operations	3
		Condensed Consolidated Statements of Cash Flows	4
		Notes to Condensed Consolidated Financial Statements	5
		See separate index for financial statements of LIN Television Corporation	24
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		21
Item 4.	Controls and Procedures		21
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		21
Item 6.	Exhibits		21
Signature Page			23
EX-10.1 Separation Agreement and General Release
EX-31.1 Certification of CEO - LIN TV Corp.
EX-31.2 Certification of CFO - LIN TV Corp.
EX-31.3 Certification of CEO - LIN Television
EX-31.4 Certification of CFO - LIN Television
EX-32.1 Certification Pursuant to Section 906 LIN TV Corp.
EX-32.2 Certification Pursuant to Section 906 - LIN Television

PART I: FINANCIAL INFORMATION


Item 1.	*Financial Statements*

LIN TV CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS


				September 30,			December 31,
				2004			2003

				(Unaudited)

				(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents				$	9,677		$	9,475
Accounts receivable, less allowance for doubtful accounts (2004 - $1,146; 2003 - $1,698)					67,024			72,340
Program rights					20,154			17,661
Other current assets					6,634			3,216

	Total current assets				103,489			102,692
Property and equipment, net					195,972			203,049
Deferred financing costs					11,762			14,332
Equity investments					65,844			77,305
Program rights					13,814			11,444
Goodwill					583,097			586,269
Broadcast licenses and other intangible assets, net					1,118,103			1,105,997
Other assets					15,587			14,822

			Total assets	$	2,107,668		$	2,115,910


LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt				$	11,000		$	7,000
Accounts payable					6,282			7,169
Accrued interest expense					9,090			9,846
Accrued sales volume discount					4,309			6,075
Other accrued expenses					18,276			13,743
Program obligations					26,170			23,042

	Total current liabilities				75,127			66,875
Long-term debt, excluding current portion					632,303			693,367
Deferred income taxes, net					538,500			527,588
Program obligations					13,128			11,640
Other liabilities					39,328			54,306

		Total liabilities			1,298,386			1,353,776

Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 173,822 issued and outstanding at September 30, 2004					14,440			—

Stockholders’ equity:
Class A common stock, $0.01 par value, 100,000,000 shares authorized, 26,891,303 shares at September 30, 2004 and 26,652,060 shares at December 31, 2003, issued and outstanding					269			266
Class B common stock, $0.01 par value, 50,000,000 shares authorized, 23,508,119 shares at September 30, 2004 and 23,510,137 shares at December 31, 2003, issued and outstanding; convertible into an equal number of Class A or Class C common stock					235			235
Class C common stock, $0.01 par value, 50,000,000 shares authorized, 2 shares at September 30, 2004 and December 31, 2003, issued and outstanding; convertible into an equal number of Class A common stock					—			—
Additional paid-in capital					1,068,806			1,066,897
Accumulated deficit					(264,009	)		(294,805	)
Accumulated other comprehensive loss					(10,459	)		(10,459	)

		Total stockholders’ equity			794,842			762,134

			Total liabilities, preferred stock and stockholders’ equity	$	2,107,668		$	2,115,910

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TV CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



		Three Months Ended						Nine Months Ended
		September 30,						September 30,

		2004			2003			2004			2003


		(In thousands, except per share information)
		(Unaudited)
Net revenues		$	91,005		$	84,278		$	267,187		$	247,109
Operating costs and expenses:
	Direct operating (excluding depreciation of $7.5 million and $7.1 million for the three months ended September 30, 2004 and 2003, respectively, and $22.7 million and $22.5 million for the nine months ended September 30, 2004 and 2003, respectively)		25,638			24,970			75,658			73,933
	Selling, general and administrative		22,737			21,751			69,725			64,982
	Amortization of program rights		6,481			5,706			18,116			16,202
	Corporate		5,542			3,695			13,570			11,899
	Depreciation and amortization of intangible assets		7,728			7,385			23,545			23,292

Total operating costs and expenses			68,126			63,507			200,614			190,308

Operating income			22,879			20,771			66,573			56,801
Other (income) expense:
	Interest expense, net		10,888			12,254			34,414			47,258
	Share of income in equity investments		(2,250	)		(736	)		(5,014	)		(2,136	)
	Minority interest in loss of Banks Broadcasting, Inc.		(226	)		—			(472	)		—
	Gain on derivative instruments		(9,026	)		(2,490	)		(13,646	)		(7,250	)
	Loss on early extinguishment of debt		—			—			4,447			53,105
	Other, net		917			(80	)		1,138			711

Total other expense, net			303			8,948			20,867			91,688
Income (loss) from continuing operations before provision for income taxes and cumulative effect of change in accounting principle			22,576			11,823			45,706			(34,887	)
Provision for income taxes			7,760			6,509			16,960			11,371

Income (loss) from continuing operations before cumulative effect of change in accounting principle			14,816			5,314			28,746			(46,258	)
Discontinued operations:
	Loss (income) from discontinued operations, net of tax provision of $206 and $618 for the three and nine months ended September 30, 2003, respectively, and $311 for the nine months ended September 30, 2004		—			290			(44	)		178
	(Gain) loss from sale of discontinued operations, net of tax provision of $109 for the three and nine months ended September 30, 2003 and a tax benefit of $1,094 for the nine months ended September 30, 2004		—			(864	)		1,284			(212	)
Cumulative effect of change in accounting principle, net of a tax effect of $0			—			—			(3,290	)		—

Net income (loss)		$	14,816		$	5,888		$	30,796		$	(46,224	)

*Basic income (loss) per common share:*
	Income (loss) from continuing operations before cumulative effect of change in accounting principle	$	0.29		$	0.11		$	0.57		$	(0.93	)
	Loss from discontinued operations, net of tax		—			(0.01	)		—			—
	Gain (loss) from sale of discontinued operations, net of tax		—			0.02			(0.03	)		—
	Cumulative effect of change in accounting principle, net of tax		—			—			0.07			—
	Net income (loss)		0.29			0.12			0.61			(0.93	)
	Weighted-average number of common shares outstanding used in calculating basic income (loss) per common share		50,350			50,021			50,272			49,955
*Diluted income (loss) per common share:*
	Income (loss) from continuing operations before cumulative effect of change in accounting principle	$	0.29		$	0.11		$	0.56		$	(0.93	)
	Loss from discontinued operations, net of tax		—			(0.01	)		—			—
	Gain (loss) from sale of discontinued operations, net of tax		—			0.02			(0.03	)		—
	Cumulative effect of change in accounting principle, net of tax		—			—			0.06			—
	Net income (loss)		0.29			0.12			0.60			(0.93	)
	Weighted-average number of common shares outstanding used in calculating diluted income (loss) per common share		50,961			50,557			51,005			49,955

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TV CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



		Nine Months Ended
		September 30,

		2004			2003


		(In thousands)

		(Unaudited)
OPERATING ACTIVITIES:
Net income (loss)		$	30,796		$	(46,224	)
Adjustment to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization of intangible assets		23,545			23,292
	Amortization of financing costs and note discounts		6,036			12,494
	Amortization of program rights		18,116			16,202
	Program payments		(18,336	)		(16,948	)
	Loss on extinguishment of debt		4,447			53,105
	Cumulative effect of change in accounting principle, net of tax impact		(3,290	)		—
	Gain on derivative instruments		(13,646	)		(7,250	)
	Loss (gain) on sale of stations, net of tax impact		1,284			(212	)
	Share of income in equity investments		(5,014	)		(2,136	)
	Deferred income taxes, net		13,000			9,828
	Other, net		(48	)		858
Changes in operating assets and liabilities, net of acquisitions and disposals:
	Accounts receivable		5,092			8,714
	Program rights, net of program obligations		233			3,491
	Other assets		(4,146	)		(6,429	)
	Accounts payable		(1,122	)		(7,267	)
	Accrued interest expense		(756	)		(6,004	)
	Accrued sales volume discount		(1,766	)		(1,404	)
	Other accrued expenses		6,957			(2,786	)

Net cash provided by operating activities			61,382			31,324
INVESTING ACTIVITIES:
Capital expenditures			(17,500	)		(15,006	)
Proceeds from sale of broadcast licenses and related operating assets			24,000			10,000
Investment in equity investments			(650	)		—
Capital distributions from equity investments			5,503			4,891
Acquisition of broadcast licenses			(9,152	)		—
Other, net			29			(30	)
Proceeds from liquidation of short-term investments			—			23,691

Net cash provided by investing activities			2,230			23,546

FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances			1,563			1,803
Proceeds from long-term debt			—			325,000
Proceeds from Senior Credit Facilities			—			175,000
Long-term debt financing costs			(147	)		(10,049	)
Net (repayments) proceeds from revolver debt			(18,000	)		27,000
Principal payments on long-term debt			(43,810	)		(677,750	)
Cash expenses associated with early extinguishment of debt			(3,016	)		(26,056	)

Net cash used in financing activities			(63,410	)		(185,052	)

Net increase (decrease) in cash and cash equivalents			202			(130,182	)
Cash and cash equivalents at the beginning of the period			9,475			143,860

Cash and cash equivalents at the end of the period		$	9,677		$	13,678

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TV CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 1 —	Basis of Presentation:

LIN TV Corp., together with its subsidiaries, including LIN Television Corporation (“LIN Television”) (together, the “Company”), is a television station group operator in the United States and Puerto Rico. LIN TV Corp. and its subsidiaries are affiliates of Hicks, Muse, Tate & Furst Incorporated (“Hicks Muse”).

LIN TV Corp. guarantees all debt of LIN Television except for its $166.4 million, 8% Senior Notes due 2008. All of the consolidated wholly-owned subsidiaries of LIN Television fully and unconditionally guarantee all the Company’s debt on a joint and several basis.

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation.

These condensed consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company filed audited financial statements for the year ended December 31, 2003 in its annual report on Form 10-K/A, which includes all such information and disclosures.

In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments (consisting of normal recurring adjustments and adjustments related to the application of FASB Interpretation No. 46) necessary to summarize fairly the financial position, results of operations and cash flows of the Company for the periods presented. The interim results of operations are not necessarily indicative of the results to be expected for the full year.

The Company’s preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Estimates are used when accounting for the collectibility of accounts receivable and valuing intangible assets, deferred tax assets and net assets of businesses acquired. Actual results could differ from these estimates.


Note 2 —	Stock-Based Compensation:

The Company accounts for its stock-based employee compensation plans under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations.

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table illustrates the effect on net income (loss) and net income (loss) per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation (in thousands, except for per share data).



	Three Months Ended						Nine Months Ended
	September, 30						September, 30

	2004			2003			2004			2003

Net income (loss), as reported	$	14,816		$	5,888		$	30,796		$	(46,224	)
Add: Stock-based employee compensation expense, included in reported net income (loss), net of related tax effect		117			—			156			—
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effect		(1,016	)		(764	)		(2,516	)		(2,210	)

Pro forma net income (loss)	$	13,917		$	5,124		$	28,436		$	(48,434	)

Basic net income (loss) per common share, as reported	$	0.29		$	0.12		$	0.61		$	(0.93	)
Basic net income (loss) per common share, pro forma	$	0.28		$	0.10		$	0.57		$	(0.97	)
Diluted net income (loss) per common share, as reported	$	0.29		$	0.12		$	0.60		$	(0.93	)
Diluted net income (loss) per common share, pro forma	$	0.27		$	0.10		$	0.56		$	(0.97	)

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions during the three and nine months ended September 30, 2004 and 2003, respectively:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,

	2004		2003		2004		2003

Volatility		24%		30%		24%		30%
Risk-free interest rates		2.0 - 3.2%		1.5 - 3.0%		2.0 - 4.4%		1.5 - 3.0%
Weighted average expected life		4.5 years		3.5 years		5 years		3.5 years
Dividend yields		0%		0%		0%		0%

Note 3 — Disposition of Station:

On May 14, 2004, the Company completed the sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million.

The operating results of this station for the three and nine month periods ended September 30, 2004 and 2003, respectively, have been excluded from continuing operations and included in discontinued operations under the provisions of SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” During the nine month period ended September 30, 2004, the Company recorded a loss on the sale of WEYI-TV of $1.3 million, net of a tax benefit of $1.1 million, compared to a gain on the sale of KRBC-TV and KACB-TV of $212,000 recorded during the nine month period ended September 30, 2003.

The following table summarizes the net revenues and pre-tax income (loss) for WEYI-TV that had been included in historical results (in thousands):



	Three Months Ended					Nine Months Ended
	September, 30					September, 30

	2004		2003			2004		2003

Net revenues	$	—	$	1,490		$	3,258	$	4,991
Pre-tax (loss) income		—		(84	)		355		440

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 4 —	Investments:

The Company has investments in a number of ventures with third parties, through which it has an interest in television stations in locations throughout the United States of America. The following presents the Company’s basis in these ventures (in thousands):


	September 30,		December 31,
	2004		2003

Banks Broadcasting, Inc.	$	—	$	11,297
NBC joint venture		55,710		55,758
WAND (TV) Partnership		10,134		10,250

	$	65,844	$	77,305

Banks Broadcasting, Inc: The Company owns preferred stock that represents a 50% non-voting interest in Banks Broadcasting, Inc. (“Banks Broadcasting”), which owns and operates KWCV-TV, a WB affiliate in Wichita, Kansas and KNIN-TV, a UPN affiliate in Boise, Idaho. The Company is able to exercise significant, but not controlling, influence over the activities of Banks Broadcasting through representation on the Board of Directors. The Company has also entered into a management services agreement with Banks Broadcasting to provide specified management, engineering and related services for a fixed fee. Included in this agreement is a cash management arrangement under which the Company incurs expenditures on behalf of Banks Broadcasting and is periodically reimbursed.

In accordance with FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51,” Banks Broadcasting is considered to be a variable interest entity. For purposes of determining the primary beneficiary of Banks Broadcasting, the Company considered Hicks Muse & Co. Partners, L.P. (“Hicks Muse Partners”) 47% ownership in the Company and Hicks Muse’s substantial economic interest in 21^st Century Group, LLC which owns 18% of Banks Broadcasting; and determined for purposes of FIN 46 that the Company and 21^st Century Group, LLC are related parties. Considering the Company’s 50% ownership interest in Banks Broadcasting and the Company’s management agreement with Banks Broadcasting, the Company identified itself as the primary beneficiary of Banks Broadcasting under FIN 46. As the primary beneficiary of Banks Broadcasting, the Company consolidated Banks Broadcasting’s assets, liabilities and noncontrolling interests into the Company’s financial statements effective March 31, 2004. Since the Company and Banks Broadcasting are not under common control, as defined by Emerging Issues Task Force (“EITF”) Issue 02-5, “Definition of Common Control in Relation to FASB Statement No. 141”, Banks Broadcasting’s assets, liabilities and noncontrolling interests were measured at fair value as of March 31, 2004. The difference between the value of the newly consolidated assets over the reported amount of any previously held interests and the value of newly consolidated liabilities and non-controlling interests was recognized as a cumulative effect of an accounting change in the period ended March 31, 2004. The resulting consolidated balance sheet of the Company does not reflect any voting equity minority interest since Banks Broadcasting has incurred cumulative losses and as such the minority interest would be in a deficit position at September 30, 2004.

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following presents the summarized balance sheet of Banks Broadcasting at March 31, 2004, the date of initial consolidation (in thousands):


Assets
Cash		$	97
Accounts receivable			899
Program rights, short-term			757
Other current assets			46
Property and equipment			5,048
Program rights, long-term			662
Broadcast licenses			29,238

	Total assets	$	36,747


Liabilities and Equity
Accounts payable		$	396
Program obligations, short-term			793
Other accrued expenses			404
Program obligations, long-term			525
Deferred income taxes, net			4,805
Preferred stock			34,764

	Total liabilities and equity		41,687

Deficit		$	(4,940	)

The deficit of $4.9 million has been allocated to the nonvoting preferred stock, and the Company’s ownership of such preferred stock has been eliminated on consolidation.

Hicks Muse has a substantial economic interest in 21^st Century Group, LLC which owns 36% of the preferred stock on the Company’s balance sheet.

Joint Venture with NBC: The Company owns a 20.38% interest in a joint venture with NBC and accounts for its interest using the equity method, as the Company does not have a controlling interest. The Company received distributions of $2.2 million and $5.5 million from the joint venture in the three and nine months ended September 30, 2004, respectively, and $1.6 million and $4.9 million in the three and nine months ended September 30, 2003, respectively.

The following presents the summarized financial information of the joint venture (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,

	2004		2003		2004		2003

Net revenues	$	46,659	$	39,679	$	129,102	$	116,176
Operating income		27,795		23,233		75,353		65,925
Net income		11,436		5,630		26,761		16,292


	September 30,		December 31,
	2004		2003

Current assets	$	24,392	$	9,949
Non-current assets		238,734		237,469
Current liabilities		17		725
Non-current liabilities		815,500		815,500

WAND (TV) Partnership: The Company has a 33.33% interest in a partnership, WAND (TV) Partnership, with Block Communications. The Company accounts for its interest using the equity method, as the Company does not have a controlling interest. The Company has also entered into a management services agreement with WAND (TV) Partnership to provide specified management, engineering and related services for a fixed fee. Included in this agreement is a cash management arrangement under which the Company incurs expenditures on behalf of WAND (TV) Partnership and is periodically reimbursed.

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following presents the summarized financial information of the WAND (TV) Partnership (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2004			2003			2004			2003

Net revenues	$	1,440		$	1,485		$	4,737		$	4,679
Operating loss		(165	)		(174	)		(269	)		(244	)
Net loss		(243	)		(239	)		(346	)		(318	)


	September 30,		December 31,
	2004		2003

Current assets	$	2,659	$	2,013
Non-current assets		24,492		25,168
Current liabilities		678		405
Non-current liabilities		44		—


Note 5 —	Intangible Assets:

The following table summarizes the carrying amount of each major class of intangible assets (in thousands):


	September 30,			December 31,
	2004			2003

Amortized Intangible Assets:
LMA purchase options	$	2,388		$	2,388
Network affiliations		173			377
Income leases		393			393
Other intangible assets		2,020			2,025
Accumulated amortization		(2,586	)		(1,891	)

		2,388			3,292
Unamortized Intangible Assets:
Broadcast licenses		1,115,715			1,102,705

Total broadcast licenses and other intangible assets, net	$	1,118,103		$	1,105,997
Goodwill		583,097			586,269

Total intangible assets	$	1,701,200		$	1,692,266

The decrease of $204,000 in network affiliations is due to the network affiliation switch of the Company’s television station in Dayton, Ohio. The increase in broadcast licenses is due to the acquisition of the broadcast license of WIRS-TV on January 14, 2004 for $4.5 million, the acquisition of the broadcast license of WTIN-TV on May 6, 2004 for $4.9 million and the consolidation of Banks Broadcasting under FIN 46 as of March 31, 2004 for $29.2 million offset by the sale of WEYI-TV, completed on May 14, 2004, for $18.8 million and the tax adjustment related to the Company’s valuation allowance on deferred tax assets for $6.8 million. The decrease in goodwill is due to the tax adjustment related to the Company’s valuation allowance on deferred tax assets for $3.2 million.

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the aggregate amortization expense for all periods presented as well as the estimated amortization expense for the next five years (in thousands):



	Three Months				Nine Months
	Ended				Ended				Estimated Amortization Expense
	September 30,				September 30,				For the Year Ended December 31,

	2004		2003		2004		2003		2004		2005		2006		2007		2008

Amortization expense	$	270	$	278	$	825	$	824	$	1,041	$	1,041	$	1,006	$	—	$	—


Note 6 —	Debt:

Debt consisted of the following (in thousands):


	September 30,		December 31,
	2004		2003

Senior Credit Facilities	$	170,250	$	193,500
$166,440 and $205,000 at September 30, 2004 and December 31, 2003, respectively, 8% Senior Notes due 2008 (net of discount of $3,118 and $4,706 at September 30, 2004 and December 31, 2003, respectively)		163,322		200,294
$200,000, 6 1/2% Senior Subordinated Notes due 2013		200,000		200,000
$125,000, 2.50% Exchangeable Senior Subordinated Debentures due 2033 (net of discount of $15,269 and $18,427 at September 30, 2004 and December 31, 2003, respectively)		109,731		106,573

Total debt		643,303		700,367
Less current portion		11,000		7,000

Total long-term debt	$	632,303	$	693,367

During the nine months ended September 30, 2004, the Company drew down funds from its revolving credit facility to repurchase $38.6 million of LIN Television Corporation’s 8% Senior Notes due 2008 in a negotiated transaction with an institutional investor. The Company incurred charges of $4.4 million during the nine months ended September 30, 2004 related to the write-off of unamortized discounts, deferred financing fees and associated costs as a result of the early extinguishment of debt.

The current portion of long-term debt includes $7.0 million of annual amortization of a term loan under our Senior Credit Facility and $4.0 million borrowed under the revolving credit facility, which terminates March 31, 2005.


Note 7 —	Related Party Transactions:

Financial Advisory Agreement. The Company is party to an agreement with Hicks Muse Partners, pursuant to which the Company reimburses Hicks Muse Partners, an affiliate of Hicks Muse, for certain reimbursable expenses incurred by it in connection with rendering services relating to acquisitions, sales, mergers, exchange offers, recapitalization, restructuring or similar transactions allocable to the Company. The Company incurred fees under this arrangement of $4,000 and $14,000 for the three and nine months ended September 30, 2004, respectively and $17,000 and $55,000 for the same periods in the prior year.

Local Marketing Agreement. The Company is party to a local marketing agreement with Super Towers, Inc., of which the President is related to a LIN TV Corp. executive. The Company has paid Super Towers, Inc. approximately $16,000 and $25,000 for the three and nine months ended September 30, 2004,

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

respectively, for various reimbursable expenses, and $24,000 and $45,000 for the same periods in the prior year.

Banks Broadcasting Inc. The Company has entered into a management services agreement with Banks Broadcasting to provide specified management, engineering and related services for a fixed fee. Hicks Muse has substantial economic interest in 21^st Century Group, LLC which owns 18% of Banks Broadcasting. Prior to the consolidation of Banks Broadcasting in accordance with FIN 46 as of March 31, 2004, the Company received approximately $50,000 for the three months ended March 31, 2004 and $50,000 and $150,000 for the three and nine months ended September 30, 2003, respectively, under the management services agreement.

Other Investments. The Company’s Chief Executive Officer serves on the Board of Directors of an internet company in which the Company has invested. The Company incurred fees for internet services provided by this company of $156,000 and $427,000 for the three and the nine months ended September 30, 2004, respectively, and $121,000 and $365,000 for the same periods in the prior year.


Note 8 —	Contingencies:

GECC Note. General Electric Capital Corporation (“GECC”) provided debt financing in connection with the formation of the joint venture with NBC in the form of an $815.5 million 25-year non-amortizing senior secured note bearing an initial interest rate of 8.0% per annum (“the GECC note”). During the last five years, the joint venture has produced cash flows to support the interest payments and to maintain minimum levels of required working capital reserves. In addition, the joint venture has made cash distributions to the Company and to NBC from the excess cash generated by the joint venture of approximately $19.3 million on average each year during the past three years. Accordingly, the Company expects that the interest payments on the GECC note will be serviced solely by the cash flow of the joint venture. The GECC note is not an obligation of the Company, however, the note is recourse to the joint venture with NBC and is guaranteed by LIN TV Corp. If the joint venture were unable to pay principal or interest on the GECC note and GECC could not otherwise recoup its principal from the joint venture, GECC could require LIN TV Corp. to pay the shortfall of any outstanding amounts under the GECC note. If this happened, the Company could experience material adverse consequences, including:

• GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to satisfy outstanding amounts under the GECC note;

• if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC Note, it could cause an acceleration of the Company’s senior credit facilities and senior notes; and

• if the GECC note is prepaid because of an acceleration on default or otherwise, or if the note is repaid at maturity, the Company may incur a substantial tax liability.

The joint venture is approximately 80% owned by NBC, and NBC controls the operations of the stations through a management contract. Therefore, the operation and profitability of those stations and the likelihood of a default under the GECC note are primarily within NBC’s control.


Note 9 —	Retirement Plans:

The Company has a number of noncontributory defined benefit retirement plans covering certain of its employees in the United States and Puerto Rico. Contributions are based on periodic actuarial valuations and are charged to operations on a systematic basis over the expected average remaining service lives of current employees. The net pension expense is assessed in accordance with the advice of professionally qualified actuaries. The benefits under the defined benefit plans are based on years of service and compensation.

LIN TV CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of the net periodic benefit cost recognized are as follows (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2004			2003			2004			2003

Service cost	$	494		$	457		$	1,494		$	1,371
Interest cost		1,352			1,311			4,154			3,933
Expected return on plan assets		(1,364	)		(1,408	)		(4,264	)		(4,224	)
Amortization of prior service cost		47			41			125			123
Amortization of net loss		103			63			263			189

Net periodic benefit cost	$	632		$	464		$	1,772		$	1,392

As of September 30, 2004, the Company has contributed $900,000 to the plan, and expects to contribute a total of $4.2 million during 2004. The Company also has a non-qualified, unfunded Supplemental Excess Retirement Plan (“SERP”). The timing of the payments under the SERP is determined by individual employees’ decisions to retire and commence payments. The Company has funded approximately $416,000 of SERP payments during the nine months ended September 30, 2004.


Note 10 —	Earnings Per Share:

Basic and diluted income (loss) per common share are computed in accordance with SFAS No. 128, “Earnings per Share.” Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding. There is no difference between basic and diluted income (loss) per common share for the nine months ended September 30, 2003 since potential common shares from the exercises of stock options and phantom units are anti-dilutive to loss from continuing operations for and are, therefore, excluded from the calculation. Dilutive common stock equivalents relating to options and phantom units of 3,785,000 shares and 929,000 shares for the three month periods ended September 30, 2004 and 2003, respectively, and 2,880,000 shares for the nine months ended September 30, 2004 were excluded from the diluted income (loss) per share calculation because the effect of their inclusion would have been anti-dilutive. Options to purchase 3,600,000 shares of common stock and phantom units exercisable into 572,000 shares of common stock were not included in the calculation of diluted income (loss) per share for the nine months ending September 30, 2003 because the effect of their inclusion would have been anti-dilutive.


Note 11 —	Income Taxes:

Prior to January 1, 2002, the Company recorded deferred tax liabilities relating to the difference in the book basis and tax basis of goodwill and intangibles. The reversals of those deferred tax liabilities were utilized to support the recognition of deferred tax assets (primarily consisting of net operating loss carryforwards) recorded by the Company. As a result of the adoption of SFAS No. 142, those deferred tax liabilities will no longer reverse on a scheduled basis and can no longer be utilized to support the realization of deferred tax assets. Accordingly, the Company’s provision for income taxes is primarily created by an increase in the valuation allowance against the increase in the deferred tax asset position during the year. This expense has no impact on the Company’s cash flows.


Note 12 —	Recent Accounting Pronouncements

EITF Issue 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” which is effective for the Company as of December 31, 2004, requires that the potential shares associated with the contingent conversion feature of the Company’s 2.50% Exchangeable Senior Subordinated Debentures due 2003 be included in the calculation of diluted EPS regardless of whether the market price trigger has been met. The Company does not believe that EITF 04-8 will have a significant impact on the Company’s results of operations.

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

Special Note About Forward-Looking Statements

This quarterly report on Form 10-Q contains certain forward-looking statements with respect to our financial condition, results of operations and business, including statements under the captions “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All of these forward-looking statements are based on estimates and assumptions made by our management which, although we believe to be reasonable, are inherently uncertain. Therefore, you should not place undue reliance upon such estimates and statements. We cannot assure you that any of such estimates or statements will be realized and it is likely that actual results will differ materially from those contemplated by such forward-looking statements. Factors that may cause such differences include:

• volatility and changes in our advertising revenues;

• the outbreak and duration of hostilities or the occurrence of terrorist attacks and the duration and extent of network preemption of regularly scheduled programming and decisions by advertisers to withdraw or delay planned advertising expenditures as a result of military action or terrorist attacks;

• restrictions on our operations due to, and the effect of, our significant leverage;

• effects of complying with new accounting standards, including with respect to the treatment of our intangible assets;

• inability to consummate acquisitions on attractive terms;

• increases in our cost of borrowings or inability or unavailability of additional debt or equity capital;

• increased competition, including from newer forms of entertainment and entertainment media or changes in the popularity or availability of programming;

• increased costs, including increased capital expenditures as a result of necessary technological enhancements such as expenditures related to the transition to digital broadcasting, or acquisitions or increased programming costs;

• effects of our control relationships, including the control that Hicks Muse and its affiliates have with respect to corporate transactions and activities we undertake;

• adverse state or federal legislation or regulation or adverse determinations by regulators including adverse changes in, or interpretations of, the exceptions to the FCC “duopoly” rule; and

• changes in general economic conditions in the markets in which we compete.

Many of these factors are beyond our control. Forward-looking statements contained herein speak only as of the date hereof. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Executive Summary

We are an owner and operator of 23 television stations in 14 mid-sized markets in the United States. Our operating revenues are primarily derived from local and national advertising sales.

The broadcast television industry is cyclical in nature, being affected by prevailing economic conditions. Since we rely on sales of advertising time for substantially all of our revenues, our operating results are

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

sensitive to general economic conditions and regional conditions in each of the local market areas in which our stations operate.

In addition, advertising revenues are seasonal and are generally lower in the first quarter of each fiscal year, due in part to increases in retail advertising in the period leading up to and including the holiday season and active advertising in the spring. Advertising revenues also are generally higher during election years due to spending by political candidates.

Political revenue is also a factor when comparing our results year over year. During an election year, political revenue makes up a significant portion of the increase in revenue in that year. Since 2004 is a presidential election year and political revenues during a presidential election year are generally higher than during a non-presidential election year, we expect a large percentage of our revenue growth in 2004 to be attributable to political revenue. We experienced a $5.1 million and $9.3 million increase in political revenue during the three and nine months ended September 30, 2004, respectively, compared to the same periods in the prior year. We expect an additional increase in political revenue in the fourth quarter of 2004 followed by a substantial decrease in 2005.

Our automotive-related advertising revenue increased $1.2 million and $11.0 million for the three and nine months ended September 30, 2004, respectively, compared to the same periods in the prior year. We are dependent to a significant degree on automotive-related advertising. Approximately 25% and 23% of our total net revenues for the nine months ended September 30, 2004 and 2003, respectively, consisted of automotive advertising. A significant change in these advertising revenues in the future could materially affect our results of operations.

Dispositions and Acquisition of Broadcast Licenses

• On May 14, 2004, we completed the sale of the broadcast license and certain assets of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million. The loss on sale and operating results of this station are excluded from continuing operations and included in discontinued operations for all periods presented.

• On May 6, 2004, we acquired the broadcast license and certain assets of WTIN-TV in Ponce, Puerto Rico for a total purchase price of $4.9 million.

• On January 14, 2004, we acquired the broadcast license and certain assets of WIRS-TV in Yauco, Puerto Rico for a total purchase price of $4.5 million.

Effective March 31, 2004, our investment in Banks Broadcasting, Inc. (“Banks Broadcasting”), an entity in which we own a 50% non-voting interest, is accounted for under FASB Interpretation No. 46 (“FIN 46”) “Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51,” which requires us to consolidate Banks Broadcasting in our financial statements.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States.

The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and equity and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Areas where significant estimates are made include valuation of long-lived assets and intangible assets, network affiliations, deferred tax assets, revenue recognition, stock-based compensation, allowance for doubtful accounts, amortization of program rights, collectability of receivables, barter

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

transactions and net assets of businesses acquired. These estimates have a material impact on our financial statements and are discussed in detail throughout our analysis of the results of operations as discussed below. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions. For a more detailed explanation of the judgments made in these areas and a discussion of our accounting policies, refer to “Critical Accounting Policies, Estimates and Recently Issued Accounting Pronouncements” included in Item 7 and “Summary of Significant Accounting Policies” (Note 2) included in Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2003. Since December 31, 2003, there have been no significant changes to our critical accounting policies.

Off-Balance Sheet Arrangements

We do not have any contractual relationships with unconsolidated entities, including special purpose entities or variable interest entities, for the purpose of facilitating off-balance sheet arrangements. We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

Results of Operations

Set forth below are significant factors that contributed to our operating results for the three and nine months ended September 30, 2004 and 2003, respectively.



		Three Months Ended							Nine Months Ended
		September 30,							September 30,
						%							%
		2004		2003		Change			2004		2003		Change

National time sales, net		$	26,292	$	26,739		(2	)%	$	78,971	$	78,132		1	%
Local time sales, net			51,107		48,522		5	%		155,917		145,123		7	%
Political time sales, net			6,316		1,230		413	%		11,488		2,217		418	%
Other revenue			7,290		7,787		(6	)%		20,811		21,637		(4	)%

	Net revenue		91,005		84,278		8	%		267,187		247,109		8	%
Operating costs and expenses:
	Direct operating (excluding $7.5 million and $7.1 million of depreciation for the three months ended September 30, 2004 and 2003, respectively, and $22.7 million and $22.5 million for the nine months ended September 30, 2004 and 2003, respectively)		25,638		24,970		3	%		75,658		73,933		2	%
	Selling, general and administrative		22,737		21,751		5	%		69,725		64,982		7	%
	Amortization of program rights		6,481		5,706		14	%		18,116		16,202		12	%
	Corporate		5,542		3,695		50	%		13,570		11,899		14	%
	Depreciation and amortization of intangible assets		7,728		7,385		5	%		23,545		23,292		1	%

Total operating costs and expenses			68,126		63,507		7	%		200,614		190,308		5	%

Operating income		$	22,879	$	20,771		10	%	$	66,573	$	56,801		17	%

Net revenues consist primarily of national, local and political airtime sales, net of sales adjustments and agency commissions. Additional, but less significant, amounts are generated from network compensation, internet revenues, barter revenues, production revenues, tower rental income and carriage or retransmission agreements.

Net revenues increased $6.7 million or 8% and $20.1 million or 8% for the three and nine months ended September 30, 2004, respectively, compared to the same periods in the prior year. The increase is primarily driven by increased political and local revenues. Political time sales increased $5.1 million and $9.3 million for the three and nine months ended September 30, 2004, respectively. We expect this trend to continue into the beginning of the fourth quarter of 2004, but expect political revenue to decrease substantially in 2005.

Automotive-related advertising which makes up approximately 25% of our net revenue increased $1.2 million or 5% for the third quarter of 2004 and $11.0 million or 16% for the nine months ended September 2004 compared to the comparable periods in the prior year. Net revenue attributable to Banks Broadcasting, which was consolidated in accordance with FIN 46 effective March 31, 2004, was $1.2 million and $2.5 million for the three and nine months ended September 30, 2004, respectively.

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

Operating Costs and Expenses

Direct operating expenses (excluding depreciation and amortization of intangible assets) consist primarily of news, engineering, programming and music licensing costs and exclude depreciation and amortization expense.

Selling, general and administrative expenses consist primarily of employee salaries, sales commissions and other employee benefit costs, advertising and promotional expenses and research services. For the three and nine months ended September 30, 2004, selling, general and administrative expenses increased $1.0 million to $22.7 million and $4.7 million to $69.7 million, respectively, compared to the same periods in the prior year. The increase is primarily due to increased expenses of $0.7 million and $1.4 million for the three and nine months ended September 30, 2004, respectively, attributable to the consolidation of Banks Broadcasting. The remaining increase is a combination of an increase in sales commissions of $0.3 million and $1.6 million for the three and nine months ended September 30, 2004, respectively, corresponding to the increase in time sales and other increases in employee compensation expense.

Amortization of program rights represents costs associated with the acquisition of syndicated programming, features and specials. Amortization of program rights increased $0.8 million or 14% and $1.9 million or 12% for the three and nine months ended September 30, 2004, respectively, compared to the same periods in the prior year. The increase is primarily due to amortization resulting from reducing the carrying value of certain syndicated programming to equal the amount of projected future net revenue.

Corporate expenses, consisting of costs associated with the centralized management of our stations, increased $1.8 million for both the three and nine months ended September 30, 2004 compared to the same periods in the prior year. The increase in 2004 is primarily due to an increase in executive compensation, including severance costs of $0.9 million related to the departure of a company executive. Corporate expenses of $0.2 million and $0.4 million for the three and nine months ended September 30, 2004, respectively, are attributable to the consolidation of Banks Broadcasting.

Other (Income) Expense


	*Interest expense*

The following table summarizes our total interest expense:



			Three Months Ended						Nine Months Ended
			September 30,						September 30,

			2004			2003			2004			2003

Components of interest expense
	Senior Credit Facility		$	2,465		$	2,514		$	7,130		$	6,458
	$300,000, 8 3/8% Senior Subordinated Notes			—			—			—			12,515
	$200,000, 6 1/2% Senior Subordinated Notes			3,376			3,370			10,166			5,243
	$125,000, 2.50% Exchangeable Senior Subordinated Debentures			1,870			1,869			5,651			2,849
	$166,440, 8% Senior Notes			3,295			4,675			11,751			14,025
	$276,000, 10% Senior Discount Notes			—			—			—			4,973
	$100,000, 10% Senior Discount Notes			—			—			—			2,119
	Interest income			(118	)		(174	)		(284	)		(924	)

		Total interest expense, net	$	10,888		$	12,254		$	34,414		$	47,258

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

Interest expense, net decreased $1.4 million or 11% and $12.8 million or 27% for the three and nine months ended September 30, 2004, respectively, compared to the same periods in the prior year due to lower outstanding borrowings and a lower average interest rate.

Share of income in equity investments increased to $2.3 million and $5.0 million for the three and nine months ended September 30, 2004, respectively, compared to income of $0.7 million and $2.1 million for the same periods in the prior year. This increase was primarily the result of the operating performance of the stations included in our joint venture with NBC offset in part by the loss attributable to Banks Broadcasting which became a consolidated entity effective March 31, 2004 with the application of FIN 46.

Gain on derivative instruments consists of mark-to-market adjustments of the embedded derivative features contained in our 2.50% Exchangeable Senior Subordinated Debentures. Gain on derivative instruments was $9.0 million and $13.6 million for the three and nine months ended September 30, 2004, respectively, and was due to fluctuations in market interest rates, compared to gains of $2.5 million and $7.3 million in the quarter and year-to-date periods in the prior year, respectively.

We recorded a loss of $4.4 million for the nine months ended September 30, 2004 related to the write-off of unamortized financing fees and discounts and associated costs in connection with the early extinguishment of $38.6 million of 8% Senior Notes due 2008. We recorded a loss of $53.1 million for the nine months ended September 30, 2003 in connection with the early extinguishment of debt, consisting of $276.0 million aggregate principal amount of 10% Senior Discount Notes due 2008 and $100.0 million aggregate principal amount of 10% Senior Discount Add-On Notes due 2008.

Provision for Income Taxes

LIN TV Corp’s provision for income taxes for the three months ended September 30, 2004 increased to approximately $7.8 million compared to a provision of $6.5 million for the same period in the prior year. The provision for income taxes for the nine months ended September 30, 2004 increased to approximately $17.0 million compared to a provision of $11.4 million for the same period last year. The change for the three and nine months ended September 30, 2004 is primarily due to recording increased net income. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. Prior to January 1, 2002, we recorded deferred tax liabilities relating to the difference in the book and tax basis of goodwill and intangibles. The reversals of those deferred tax liabilities were utilized to support the recognition of the deferred tax assets recorded. As a result of the adoption of SFAS No. 142, those deferred tax liabilities will no longer reverse on a scheduled basis and can no longer be utilized to support the realization of deferred tax assets. LIN TV Corp. uses a discrete provision in order to more accurately calculate their provision for income taxes.

As of September 30, 2004, we have recorded a valuation allowance on our net deferred tax assets of $77.0 million. This valuation allowance may reverse at some time in the future if management concludes that it is more likely than not that the deferred tax assets will be realized. We continue to monitor the need for a valuation allowance on a quarterly basis. Any reversal will result in an increase in our net income, but not to the full extent of the reversal, in the quarter in which the reversal of the tax asset valuation allowance is made.

Liquidity and Capital Resources

Our principal sources of funds for working capital have historically been cash from operations, the issuance of debt securities and borrowings under our senior credit facilities. At September 30, 2004, we had cash of $9.7 million and a $191.9 million committed revolving credit facility of which $4.0 million is outstanding

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

at September 30, 2004, leaving $187.9 million committed, but undrawn. We have the ability to increase the revolving credit commitments up to $235.0 million. Our revolving credit facility is scheduled to terminate on March 31, 2005. We anticipate renewing this facility or replacing it with a similar revolving credit facility prior to this date.

Contractual Obligations

The following table summarizes our estimated material contractual cash obligations at September 30, 2004 (in thousands):


	October through
	December 2004		2005-2007		2008-2009		Thereafter		Total

Principal payments and mandatory redemptions on debt(1)	$	1,750	$	168,500	$	166,440	$	325,000	$	661,690
Cash interest on debt(2)		8,963		99,983		33,249		117,044		259,239
Program payments(3)		6,592		48,810		6,848		1,310		63,560
Operating leases(4)		292		2,579		704		3,709		7,284
Local marketing agreement payments(5)		912		2,203		—		—		3,115

Total	$	18,509	$	322,075	$	207,241	$	447,063	$	994,888

(1) We are obligated to repay the revolving portion of our Senior Credit Facility in March 2005 and the remaining balance in December 2007, our 8% Senior Notes in June 2008, our 6 1/2% Senior Subordinated Notes in May 2013 and our 2.50% Exchangeable Senior Subordinated Debentures in May 2033. However, the holders of our 2.50% Exchangeable Senior Subordinated Debentures can require us to purchase all or a portion of the debentures on each of May 15, 2008, 2013, 2018, 2023 and 2028.

(2) We have contractual obligations to pay cash interest on our Senior Credit Facility, as well as commitment fees of approximately 0.50% on our Senior Credit Facility through 2007, on our 8% Senior Notes through 2008, on our 6 1/2% Senior Subordinated Notes through 2013, and our 2.50% Exchangeable Senior Subordinated Debentures through 2033. We may pay contingent interest to holders of the debentures during any six-month period commencing May 15, 2008, if the average trading price of the debentures for a five trading day measurement period immediately preceding the first day of the applicable six-month period equals 120% or more of the principal amount of the debentures. The contingent interest equals 0.25% per annum per $1,000 principal amount of debentures.

(3) We have entered into commitments for future syndicated news, entertainment, and sports programming. We have recorded $39.3 million of program obligations as of September 30, 2004 and have unrecorded commitments of $24.3 million for programming that is not available to air as of September 30, 2004.

(4) We lease land, buildings, vehicles and equipment under non-cancelable operating lease agreements.

(5) We have entered into option agreements that would enable us to purchase KNVA-TV and WNAC-TV for a fixed amount under certain conditions. In connection with these agreements, we are committed to pay minimum future periodic fees totaling $3.1 million as of September 30, 2004.

Net cash provided by operating activities increased $30.1 million to $61.4 million for the nine months ended September 30, 2004 compared to $31.3 million in the same period in the prior year. The increase is the result of an increase in our operating income for the nine months ended September 30, 2004 compared

LIN TV CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS — (Continued)

to the same period in the prior year primarily due to lower interest expense in 2004 combined with improved working capital.

Net cash provided by investing activities was $2.2 million for the nine months ended September 30, 2004 compared to $23.5 million in the same period in the prior year. This change is primarily the result of the liquidation of our short-term investments during the first quarter of 2003.

Net cash used in financing activities decreased $121.7 million to $63.4 million for the nine months ended September 30, 2004 compared to $185.1 million for the same period in the prior year. This decrease is the result of the retirement of $376.0 million aggregate principle amount of 10% Senior Discount Notes and 10% Senior Discount Add-On Notes in the second quarter of 2003. This debt retirement was funded by proceeds from the $175.0 million term loan entered into during the first quarter of 2003, a $75.0 million drawdown on our existing revolving credit facility and cash on hand.

Based on the current level of our operations and anticipated future growth, both internally generated as well as through acquisition, we believe that our cash flows from operations, together with available borrowings under our senior credit facilities and anticipated refinancings, will be sufficient to meet our anticipated requirements for working capital, capital expenditures, interest payments and scheduled principal payments for at least the next 12 months.

Recent Accounting Pronouncements

Emerging Issues Task Force (“EITF”) Issue 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” which is effective for us as of December 31, 2004, requires that the potential shares associated with the contingent conversion feature of our 2.50% Exchangeable Senior Subordinated Debentures be included in the calculation of diluted EPS regardless of whether the market price trigger has been met. We do not believe that EITF 04-8 will have a significant impact on our results of operations.


Item 3.	*Quantitative and Qualitative Disclosures About Market Risk*

We are exposed to market risk from changes in interest rates principally with respect to our senior credit facilities, which are priced based on certain variable interest rate alternatives. There was approximately $170.3 million outstanding as of September 30, 2004 under our senior credit facilities.

Accordingly, we are exposed to potential losses related to increases in interest rates. A hypothetical one percent increase in the floating rate used as the basis for the interest charged on the senior credit facility as of September 30, 2004 would result in an estimated $1.7 million increase in annualized interest expense assuming a constant balance outstanding of $170.3 million.

Our 2.50% Exchangeable Senior Subordinated Debentures have certain embedded derivative features that are required to be separately identified and recorded at fair value with a mark-to-market adjustment required each quarter. The value of these features on issuance of the debentures was $21.1 million and this amount was recorded as an original issue discount and is being accreted through interest expense over the period to May 2008. The derivative features are recorded at fair market value in the line item “other liabilities.” We have recorded a gain on derivative instruments in connection with the mark-to-market of these derivative features of $9.0 million and $13.6 million for the three and nine months ended September 30, 2004, respectively.

We are also exposed to market risk related to changes in the interest rates through our investing activities and our floating rate credit arrangements. With respect to borrowings, our ability to finance future acquisition transactions may be impacted if we are unable to obtain appropriate financing at acceptable rates.


Item 4.	*Controls and Procedures*

Evaluation of Disclosure Controls and Procedures. Based on their evaluation of our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) as of September 30, 2004, our chief executive officer and chief financial officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and are operating in an effective manner.

Changes in Internal Controls over Financial Reporting. There were no significant changes in our internal controls over financial reporting or in other factors that could significantly affect these controls during the quarter ended September 30, 2004.

PART II: OTHER INFORMATION


Item 1.	*Legal Proceedings*

We are involved in various claims and lawsuits that are generally incidental to our business. We are vigorously contesting all of these matters and believe that their ultimate resolution will not have a material adverse effect on us.


Item 6.	*Exhibits*

Exhibits:


	10.1			Separation Agreement and General Release entered into by and between LIN Television Corporation and Deborah Jacobson, dated July 20, 2004.
	31.1			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer of LIN TV Corp.
	31.2			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer of LIN TV Corp.


	31.3			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer of LIN Television Corporation.
	31.4			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer of LIN Television Corporation.
	32.1			Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Principal Financial Officers of LIN TV Corp.
	32.2			Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer and Principal Financial Officers of LIN Television Corporation.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each of LIN TV Corp. and LIN Television Corporation, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LIN TV CORP.

LIN TELEVISION CORPORATION

By: /s/ VINCENT L. SADUSKY

Vincent L. Sadusky

Chief Financial Officer and Treasurer

By: /s/ WILLIAM A. CUNNINGHAM

William A. Cunningham

Vice President and Controller

(Principal Accounting Officer)

Dated: November 4, 2004


Item 1.	*Financial Statements*


LIN Television Corporation
Condensed Consolidated Balance Sheets			25
Condensed Consolidated Statements of Operations			26
Condensed Consolidated Statements of Cash Flows			27
Notes to Condensed Consolidated Financial Statements			28

LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


		September 30,			December 31,
		2004			2003

		(Unaudited)

		(In thousands, except
		share data)
ASSETS
Current assets:
Cash and cash equivalents		$	9,677		$	9,475
Accounts receivable, less allowance for doubtful accounts (2004 - $1,146; 2003 - $1,698)			67,024			72,340
Program rights			20,154			17,661
Other current assets			6,634			3,216

	Total current assets		103,489			102,692
Property and equipment, net			195,972			203,049
Deferred financing costs			11,762			14,332
Equity investments			65,844			77,305
Program rights			13,814			11,444
Goodwill			583,097			586,269
Broadcast licenses and other intangible assets, net			1,118,103			1,105,997
Other assets			15,587			14,822

	Total assets	$	2,107,668		$	2,115,910


LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt		$	11,000		$	7,000
Accounts payable			6,282			7,169
Accrued interest expense			9,090			9,846
Accrued sales volume discount			4,309			6,075
Other accrued expenses			18,276			13,743
Program obligations			26,170			23,042

	Total current liabilities		75,127			66,875
Long-term debt, excluding current portion			632,303			693,367
Deferred income taxes, net			538,500			527,588
Program obligations			13,128			11,640
Other liabilities			39,328			54,306

	Total liabilities		1,298,386			1,353,776

Preferred stock of Banks Broadcasting, Inc., $0.01 par value, 173,822 issued and outstanding at September 30, 2004			14,440			—

Stockholders’ equity:
Common stock, $0.01 par value, 1000 shares authorized, issued and outstanding			—			—
Additional paid-in capital			1,069,310			1,067,398
Accumulated deficit			(264,009	)		(294,805	)
Accumulated other comprehensive loss			(10,459	)		(10,459	)

	Total stockholders’ equity		794,842			762,134

	Total liabilities, preferred stock and stockholders’ equity	$	2,107,668		$	2,115,910

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



		Three Months Ended						Nine Months Ended
		September 30,						September 30,

		2004			2003			2004			2003


		(In thousands, except per share information)

		(Unaudited)
Net revenues		$	91,005		$	84,278		$	267,187		$	247,109
Operating costs and expenses:
	Direct operating (excluding depreciation of $7.5 million and $7.1 million for the three months ended September 30, 2004 and 2003, respectively, and $22.7 million and $22.5 million for the nine months ended September 30, 2004 and 2003, respectively)		25,638			24,970			75,658			73,933
	Selling, general and administrative		22,737			21,751			69,725			64,982
	Amortization of program rights		6,481			5,706			18,116			16,202
	Corporate		5,542			3,695			13,570			11,899
	Depreciation and amortization of intangible assets		7,728			7,385			23,545			23,292

Total operating costs and expenses			68,126			63,507			200,614			190,308

Operating income			22,879			20,771			66,573			56,801
Other (income) expense:
	Interest expense, net		10,888			12,254			34,414			47,258
	Share of income in equity investments		(2,250	)		(736	)		(5,014	)		(2,136	)
	Minority interest in loss of Banks Broadcasting, Inc.		(226	)		—			(472	)		—
	Gain on derivative instruments		(9,026	)		(2,490	)		(13,646	)		(7,250	)
	Loss on early extinguishment of debt		—			—			4,447			53,105
	Other, net		917			(80	)		1,138			711

Total other expense, net			303			8,948			20,867			91,688
Income (loss) from continuing operations before provision for income taxes and cumulative effect of change in accounting principle			22,576			11,823			45,706			(34,887	)
Provision for income taxes			7,760			6,509			16,960			11,371

Income (loss) from continuing operations before cumulative effect of change in accounting principle			14,816			5,314			28,746			(46,258	)
Discontinued operations:
	Loss (income) from discontinued operations, net of tax provision of $206 and $618 for the three and nine months ended September 30, 2003, respectively, and $311 for the nine months ended September 30, 2004		—			290			(44	)		178
	(Gain) loss from sale of discontinued operations, net of tax provision of $109 for the three and nine months ended September 30, 2003 and a tax benefit of $1,094 for the nine months ended September 30, 2004		—			(864	)		1,284			(212	)
Cumulative effect of change in accounting principle, net of a tax effect of $0			—			—			(3,290	)		—

Net income (loss)		$	14,816		$	5,888		$	30,796		$	(46,224	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TELEVISION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



		Nine Months Ended
		September 30,

		2004			2003


		(In thousands)
		(Unaudited)
OPERATING ACTIVITIES:
Net income (loss)		$	30,796		$	(46,224	)
Adjustment to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization of intangible assets		23,545			23,292
	Amortization of financing costs and note discounts		6,036			12,494
	Amortization of program rights		18,116			16,202
	Program payments		(18,336	)		(16,948	)
	Loss on extinguishment of debt		4,447			53,105
	Cumulative effect of change in accounting principle, net of tax impact		(3,290	)		—
	Gain on derivative instruments		(13,646	)		(7,250	)
	Loss (gain) on sale of stations, net of tax impact		1,284			(212	)
	Share of income in equity investments		(5,014	)		(2,136	)
	Deferred income taxes, net		13,000			9,828
	Other, net		(48	)		858
Changes in operating assets and liabilities, net of acquisitions and disposals:
	Accounts receivable		5,092			8,714
	Program rights, net of program obligations		233			3,491
	Other assets		(4,146	)		(6,429	)
	Accounts payable		(1,122	)		(7,267	)
	Accrued interest expense		(756	)		(6,004	)
	Accrued sales volume discount		(1,766	)		(1,404	)
	Other accrued expenses		6,957			(2,786	)

Net cash provided by operating activities			61,382			31,324
INVESTING ACTIVITIES:
Capital expenditures			(17,500	)		(15,006	)
Proceeds from sale of broadcast licenses and related operating assets			24,000			10,000
Investment in equity investments			(650	)		—
Capital distributions from equity investments			5,503			4,891
Acquisition of broadcast licenses			(9,152	)		—
Other, net			29			(30	)
Proceeds from liquidation of short-term investments			—			23,691

Net cash provided by investing activities			2,230			23,546

FINANCING ACTIVITIES:
Net proceeds on exercises of employee stock options and phantom stock units and employee stock purchase plan issuances			1,563			1,803
Proceeds from long-term debt			—			325,000
Proceeds from Senior Credit Facilities			—			175,000
Long-term debt financing costs			(147	)		(10,049	)
Net (repayments) proceeds from revolver debt			(18,000	)		27,000
Principal payments on long-term debt			(43,810	)		(677,750	)
Cash expenses associated with early extinguishment of debt			(3,016	)		(26,056	)

Net cash used in financing activities			(63,410	)		(185,052	)

Net increase (decrease) in cash and cash equivalents			202			(130,182	)
Cash and cash equivalents at the beginning of the period			9,475			143,860

Cash and cash equivalents at the end of the period		$	9,677		$	13,678

The accompanying notes are an integral part of the condensed consolidated financial statements.

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


Note 1 —	Basis of Presentation:

LIN TV Corp. guarantees all debt of LIN Television Corporation except for its $166.4 million, 8% Senior Notes due 2008. All of the consolidated wholly-owned subsidiaries of LIN Television Corporation fully and unconditionally guarantee all the Company’s debt on a joint and several basis.

Certain reclassifications have been made to the prior period financial statements to conform to the current period financial statement presentation.

Note 2 — Stock-Based Compensation:

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table illustrates the effect on net income (loss) if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation (in thousands, except for per share data).



	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2004			2003			2004			2003

Net income (loss), as reported	$	14,816		$	5,888		$	30,796		$	(46,224	)
Add: Stock-based employee compensation expense, included in reported net income (loss), net of related tax effect		117			—			156			—
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effect		(1,016	)		(764	)		(2,516	)		(2,210	)

Pro forma net income (loss)	$	13,917		$	5,124		$	28,436		$	(48,434	)



	Three Months Ended				Nine Months Ended
	September 30,				September 30,

	2004		2003		2004		2003

Volatility		24%		30%		24%		30%
Risk-free interest rates		2.0 - 3.2%		1.5 - 3.0%		2.0 - 4.4%		1.5 - 3.0%
Weighted average expected life		4.5 years		3.5 years		5 years		3.5 years
Dividend yields		0%		0%		0%		0%


Note 3 —	Disposition of Station:

On May 14, 2004, the Company completed the sale of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million.



	Three Months Ended					Nine Months Ended
	September, 30					September, 30

	2004		2003			2004		2003

Net revenues	$	—	$	1,490		$	3,258	$	4,991
Pre-tax (loss) income		—		(84	)		355		440

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 4 —	Investments:


	September 30,		December 31,
	2004		2003

Banks Broadcasting, Inc.	$	—	$	11,297
NBC joint venture		55,710		55,758
WAND (TV) Partnership		10,134		10,250

	$	65,844	$	77,305

In accordance with FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51,” Banks Broadcasting is considered to be a variable interest entity. For purposes of determining the primary beneficiary of Banks Broadcasting, the Company considered Hicks Muse & Co. Partners, L.P. (“Hicks Muse Partners”) 47% ownership in the Company and Hicks Muse’s substantial economic interest in 21^st Century Group, LLC which owns 18% of Banks Broadcasting; and determined for purposes of FIN 46 that the Company and 21^st Century Group, LLC are related parties. Considering the Company’s 50% ownership interest in Banks Broadcasting and the Company’s management agreement with Banks Broadcasting, the Company identified itself as the primary beneficiary of Banks Broadcasting under FIN 46. As the primary beneficiary of Banks Broadcasting, the Company consolidated Banks Broadcasting’s assets, liabilities and noncontrolling interests into the Company’s financial statements effective March 31, 2004. Since the Company and Banks Broadcasting are not under common control, as defined by Emerging Issues Task Force (“EITF”) Issue 02-5, “Definition of Common Control in Relation to FASB Statement No. 141”, Banks Broadcasting’s assets, liabilities and noncontrolling interests were measured at fair value as of March 31, 2004. The difference between the value of the newly consolidated assets over the reported amount of any previously held interests and the value of newly consolidated liabilities and noncontrolling interests was recognized as a cumulative effect of an accounting change in the period ended March 31, 2004. The resulting consolidated balance sheet of the Company does not reflect any voting equity minority interest since Banks Broadcasting has incurred cumulative losses and as such the minority interest would be in a deficit position at September 30, 2004.

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following presents the summarized balance sheet of Banks Broadcasting at March 31, 2004, the date of initial consolidation (in thousands):


Assets
Cash		$	97
Accounts receivable			899
Program rights, short-term			757
Other current assets			46
Property and equipment			5,048
Program rights, long-term			662
Broadcast licenses			29,238

	Total assets	$	36,747


Liabilities and Equity
Accounts payable		$	396
Program obligations, short-term			793
Other accrued expenses			404
Program obligations, long-term			525
Deferred income taxes, net			4,805
Preferred stock			34,764

	Total liabilities and equity		41,687

Deficit		$	(4,940	)

The deficit of $4.9 million has been allocated to the nonvoting preferred stock, and the Company’s ownership of such preferred stock has been eliminated on consolidation.

Hicks Muse has a substantial economic interest in 21^st Century Group, LLC which owns 36% of the preferred stock on the Company’s balance sheet.

The following presents the summarized financial information of the joint venture (in thousands):



	Three Months Ended				Nine Months Ended
	September 30,				September 30,

	2004		2003		2004		2003

Net revenues	$	46,659	$	39,679	$	129,102	$	116,176
Operating income		27,795		23,233		75,353		65,925
Net income		11,436		5,630		26,761		16,292


	September 30,		December 31,
	2004		2003

Current assets	$	24,392	$	9,949
Non-current assets		238,734		237,469
Current liabilities		17		725
Non-current liabilities		815,500		815,500

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following presents the summarized financial information of the WAND (TV) Partnership (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2004			2003			2004			2003

Net revenues	$	1,440		$	1,485		$	4,737		$	4,679
Operating loss		(165	)		(174	)		(269	)		(244	)
Net loss		(243	)		(239	)		(346	)		(318	)


	September 30,		December 31,
	2004		2003

Current assets	$	2,659	$	2,013
Non-current assets		24,492		25,168
Current liabilities		678		405
Non-current liabilities		44		—


Note 5 —	Intangible Assets:

The following table summarizes the carrying amount of each major class of intangible assets (in thousands):


		September 30,			December 31,
		2004			2003

Amortized Intangible Assets:
LMA purchase options		$	2,388		$	2,388
Network affiliations			173			377
Income leases			393			393
Other intangible assets			2,020			2,025
Accumulated amortization			(2,586	)		(1,891	)

			2,388			3,292
Unamortized Intangible Assets:
Broadcast licenses			1,115,715			1,102,705

	Total broadcast licenses and other intangible assets, net	$	1,118,103		$	1,105,997
Goodwill			583,097			586,269

Total intangible assets		$	1,701,200		$	1,692,266

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the aggregate amortization expense for all periods presented as well as the estimated amortization expense for the next five years (in thousands):



	Three Months				Nine Months
	Ended				Ended				Estimated amortization expense For the Year
	September 30,				September 30,				Ended December 31,

	2004		2003		2004		2003		2004		2005		2006		2007		2008

Amortization expense	$	270	$	278	$	825	$	824	$	1,041	$	1,041	$	1,006	$	—	$	—

Note 6 — Debt:

Debt consisted of the following (in thousands):


	September 30,		December 31,
	2004		2003

Senior Credit Facilities	$	170,250	$	193,500
$166,440 and $205,000 at September 30, 2004 and December 31, 2003, respectively, 8% Senior Notes due 2008 (net of discount of $3,118 and $4,706 at September 30, 2004 and December 31, 2003, respectively)		163,322		200,294
$200,000, 6 1/2% Senior Subordinated Notes due 2013		200,000		200,000
$125,000, 2.50% Exchangeable Senior Subordinated Debentures due 2033 (net of discount of $15,269 and $18,427 at September 30, 2004 and December 31, 2003, respectively)		109,731		106,573

Total debt		643,303		700,367
Less current portion		11,000		7,000

Total long-term debt	$	632,303	$	693,367

During the nine months ended September 30, 2004, the Company drew down funds from its revolving credit facility to repurchase $38.6 million of LIN Television Corporation’s 8% Senior Notes due 2008 in a negotiated transaction with an institutional investor. The Company incurred charges of $4.4 million during the nine months ended September 30, 2004, respectively, related to the write-off of unamortized discounts, deferred financing fees and associated costs as a result of the early extinguishment of debt.


Note 7 —	Related Party Transactions:

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

respectively, for various reimbursable expenses, and $24,000 and $45,000 for the same periods in the prior year.


Note 8 —	Contingencies:


Note 9 —	Retirement Plans:

LIN TELEVISION CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of the net periodic benefit cost recognized are as follows (in thousands):



	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2004			2003			2004			2003

Service cost	$	494		$	457		$	1,494		$	1,371
Interest cost		1,352			1,311			4,154			3,933
Expected return on plan assets		(1,364	)		(1,408	)		(4,264	)		(4,224	)
Amortization of prior service cost		47			41			125			123
Amortization of net loss		103			63			263			189

Net periodic benefit cost	$	632		$	464		$	1,772		$	1,392


Note 10 —	Income Taxes:


Note 11 —	Recent Accounting Pronouncements

EITF Issue 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings per Share” which is effective for the Company as of December 31, 2004, requires that the potential shares associated with the contingent conversion feature of the Company’s 2.5% Exchangeable Debentures be included in the calculation of diluted EPS regardless of whether the market price trigger has been met. The Company does not believe that EITF 04-8 will have a significant impact on the Company’s results of operations.

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents


•	GECC could force LIN TV Corp. to sell the stock of LIN Television held by LIN TV Corp. to satisfy outstanding amounts under the GECC note;

•	if more than 50% of the ownership of LIN Television had to be sold to satisfy the GECC Note, it could cause an acceleration of the Company’s senior credit facilities and senior notes; and

•	if the GECC note is prepaid because of an acceleration on default or otherwise, or if the note is repaid at maturity, the Company may incur a substantial tax liability.


•	volatility and changes in our advertising revenues;

•	the outbreak and duration of hostilities or the occurrence of terrorist attacks and the duration and extent of network preemption of regularly scheduled programming and decisions by advertisers to withdraw or delay planned advertising expenditures as a result of military action or terrorist attacks;

•	restrictions on our operations due to, and the effect of, our significant leverage;

•	effects of complying with new accounting standards, including with respect to the treatment of our intangible assets;

•	inability to consummate acquisitions on attractive terms;

•	increases in our cost of borrowings or inability or unavailability of additional debt or equity capital;

•	increased competition, including from newer forms of entertainment and entertainment media or changes in the popularity or availability of programming;

•	increased costs, including increased capital expenditures as a result of necessary technological enhancements such as expenditures related to the transition to digital broadcasting, or acquisitions or increased programming costs;

•	effects of our control relationships, including the control that Hicks Muse and its affiliates have with respect to corporate transactions and activities we undertake;

•	adverse state or federal legislation or regulation or adverse determinations by regulators including adverse changes in, or interpretations of, the exceptions to the FCC “duopoly” rule; and

•	changes in general economic conditions in the markets in which we compete.


•	On May 14, 2004, we completed the sale of the broadcast license and certain assets of WEYI-TV, the NBC affiliate serving Flint, Michigan, for $24.0 million. The loss on sale and operating results of this station are excluded from continuing operations and included in discontinued operations for all periods presented.

•	On May 6, 2004, we acquired the broadcast license and certain assets of WTIN-TV in Ponce, Puerto Rico for a total purchase price of $4.9 million.

•	On January 14, 2004, we acquired the broadcast license and certain assets of WIRS-TV in Yauco, Puerto Rico for a total purchase price of $4.5 million.


(1)	We are obligated to repay the revolving portion of our Senior Credit Facility in March 2005 and the remaining balance in December 2007, our 8% Senior Notes in June 2008, our 6 1/2% Senior Subordinated Notes in May 2013 and our 2.50% Exchangeable Senior Subordinated Debentures in May 2033. However, the holders of our 2.50% Exchangeable Senior Subordinated Debentures can require us to purchase all or a portion of the debentures on each of May 15, 2008, 2013, 2018, 2023 and 2028.

(2)	We have contractual obligations to pay cash interest on our Senior Credit Facility, as well as commitment fees of approximately 0.50% on our Senior Credit Facility through 2007, on our 8% Senior Notes through 2008, on our 6 1/2% Senior Subordinated Notes through 2013, and our 2.50% Exchangeable Senior Subordinated Debentures through 2033. We may pay contingent interest to holders of the debentures during any six-month period commencing May 15, 2008, if the average trading price of the debentures for a five trading day measurement period immediately preceding the first day of the applicable six-month period equals 120% or more of the principal amount of the debentures. The contingent interest equals 0.25% per annum per $1,000 principal amount of debentures.

(3)	We have entered into commitments for future syndicated news, entertainment, and sports programming. We have recorded $39.3 million of program obligations as of September 30, 2004 and have unrecorded commitments of $24.3 million for programming that is not available to air as of September 30, 2004.

(4)	We lease land, buildings, vehicles and equipment under non-cancelable operating lease agreements.

(5)	We have entered into option agreements that would enable us to purchase KNVA-TV and WNAC-TV for a fixed amount under certain conditions. In connection with these agreements, we are committed to pay minimum future periodic fees totaling $3.1 million as of September 30, 2004.



	William A. Cunningham
	Vice President and Controller
	(Principal Accounting Officer)