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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 o
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 or
 þ
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the transition period from
    
    December 31, 2005
    
    to
    
    June 30, 2006
 Commission File Number 000-51636
 TRIPLE CROWN MEDIA, INC.
  Delaware
    
    20-3012824(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)546 East Main Street, Lexington, Kentucky
    
    40508(Address of principal executive offices)
    
    (Zip Code)
 (859) 226-4678
  Common Stock, $.001 par value
 
 o þ
 o þ
 þ o
 o
 o o þ
 o þ
  DOCUMENTS INCORPORATED BY REFERENCE
 Documents
    
    Form 10-K ReferenceNone
    
    Not Applicable




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##### Table of Contents



TRIPLE CROWN MEDIA, INC.
FORM 10-K
For the fiscal year ended June 30, 2006
 INDEX
 PagePART IItem 1
    
    Business
    
    
    3Item 1A
    
    Risk Factors
    
    
    16Item 1B
    
    Unresolved Staff Comments
    
    
    24Item 2
    
    Properties
    
    
    25Item 3
    
    Legal Proceedings
    
    
    26Item 4
    
    Submission of Matters to a Vote of Securities Holders
    
    
    26PART IIItem 5
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    27Item 6
    
    Selected Financial Data
    
    
    28Item 7
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 8
    
    Financial Statements and Supplementary Data
    
    
    47Item 9
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    83Item 9A
    
    Controls and Procedures
    
    
    83Item 9B
    
    Other Information
    
    
    83PART IIIItem 10
    
    Directors and Executive Officers of the Registrant
    
    
    84Item 11
    
    Executive Compensation
    
    
    86Item 12
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    89Item 13
    
    Certain Relationships and Related Transactions
    
    
    91Item 14
    
    Principal Accounting Fees and Services
    
    
    92PART IVItem 15
    
    Exhibits, Financial Statement Schedules
    
    
    94Signatures
    
    
    96EX-10.16EX-10.17EX-21EX-23EX-31.1EX-31.2EX-32.1EX-32.2
 2




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PART I
 
 Item 1. Business
 General
      3




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Spin-off and Merger
    Newspaper Publishing Segment
  4




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Goshen/Jonesboro Swap
  Operations
  Year
    
    Year
    
    Principal
    
    Daily
    
    Sunday
    
    Non-DailyNewspapers
    
    Originated
    
    Acquired
    
    Location
    
    Circulation(1)
    
    Circulation(1)
    
    Distribution(2)The Albany
Herald
    
    
    1891
    
    
    
    1948
    
    
    Albany, GA
    
    
    23,100
    
    
    25,700
    
    38,500Rockdale
Citizen
    
    
    1953
    
    
    
    1994
    
    
    Conyers, GA
    
    
    6,300
    
    
    9,200
    
    n/aNewton
Citizen
    
    
    2004
    (3)
    
    
    
    
    
    Covington, GA
    
    
    4,300
    
    
    n/a
    
    n/aGwinnett
Daily Post
    
    
    1970
    (4)
    
    
    1995
    
    
    Lawrenceville, GA
    
    
    60,800
    
    
    103,200
    
    n/aThe Jackson
Progress-Argus
    
    
    1873
    
    
    
    2006
    (5)
    
    Jackson, GA
    
    
    4,200
    
    
    n/a
    
    n/aThe Henry
Daily Herald
    
    
    1867
    
    
    
    2006
    (5)
    
    McDonough, GA
    
    
    2,900
    
    
    n/a
    
    n/aThe Clayton
News Daily
    
    
    1964
    
    
    
    2006
    (5)
    
    Jonesboro, GA
    
    
    2,700
    
    
    n/a
    
    n/a
 5




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##### Table of Contents



(1)
    
    Circulation averages are derived from our internal records as of June 30, 2006. These
internal records are subject to periodic independent audit by Certified Audit of Circulations,
a circulation audit and research organization, but have not been audited as of June 30, 2006.(2)
    
    Non-Daily Distribution includes both paid and free distribution of the Albany Area
Advertiser. Non-Daily Distribution reflects the averages according to the most recent internal
reports.(3)
    
    In 2004, we began publication of the Newton Citizen.(4)
    
    The Gwinnett Daily Post was originally a weekly newspaper. In 1995, we began publishing the
Gwinnett Daily Post on a daily basis.(5)
    
    The Jonesboro Group consists of three newspapers operated as a group sharing the printing
facility at the Clayton News Daily. These newspapers were acquired in a swap transaction for
the Goshen News as of April 1, 2006. The Albany Herald.
 Gwinnett Daily Post, Rockdale Citizen and Newton Citizen.
  The Rockdale Citizen.
 6




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Jonesboro Group.
 Advertising
     Circulation
  7




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Percent Change in Daily Circulation
 December 31,
    
    June 30,2003
    
    2006
    
    DecreaseDaily circulation:Gwinnett Daily Post
    
    
    65,000
    
    
    
    60,800
    
    
    
    -6.5
    %The Albany Herald
    
    
    28,000
    
    
    
    23,100
    
    
    
    -17.5
    %The Goshen News
    
    
    16,000
    
    
    
    
    
    
    
    (1
    )Jonesboro Group
    
    
    
    
    
    
    9,800
    
    
    
    (1
    )Rockdale Citizen/Newton Citizen
    
    
    17,000
    
    
    
    10,600
    
    
    
    -37.6
    %Total
    
    
    126,000
    
    
    
    104,300
    
    
    
    -17.2
    %
 
 (1)
    
    The Goshen News was exchanged for the Jonesboro Group effective April 1, 2006
as further discussed elsewhere in this Form 10-K. Job Printing
  Online Operations
   Newspaper
    
    WebsiteThe Albany Herald
    
    www.albanyherald.comGwinnett Daily Post
    
    www.gwinnettdailypost.comRockdale Citizen
    
    www.rockdalecitizen.comNewton Citizen
    
    www.newtoncitizen.comClayton News Daily
    
    www.new-daily.comHenry Daily Herald
    
    www.henryherald.com
  Editorial
 8




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Printing and Distribution
  Newsprint
   Collegiate Marketing and Production Services Segment
  Collegiate Sports
  9




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
    
    production of radio and television broadcasts of certain athletic events and coaches shows;
    
    sale of advertising during radio and television broadcasts of games and coaches shows;
    
    sale of media advertising and venue signage;
    
    sale of official sponsorship rights to corporations;
    
    publishing, printing and vending of game-day and other programs;
    
    creative design of materials, video production, and construction and management of
Internet web sites; and
    
    coaches endorsements and pay-per-view telecasts.
     Production Services
  10




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Sales and Marketing
  Association Management Services Segment
   11




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GrayLink Wireless Segment
  Traditional Paging
 Overview.
 
    
    large, national paging companies;
    
    regional carriers like GrayLink that operate in regional markets in the United States
that can also offer service outside of their network coverage area through inter-carrier
agreements with other carriers; and
    
    small, single market carriers.
  12




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Paging Services/Subscribers.
   Coverage Area.
 Sales and Marketing.
 Product Sourcing and Key Suppliers.
 Retail Sales of Wireless Services.
 13




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Service Marks.
 Competition
 Newspaper Industry
     Collegiate Marketing and Production Services Industry
  14




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Association Management Services Industry
  Paging Industry
    Seasonality
  Federal Regulation of our Paging Business
  15




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Environmental Matters
  Employees
  Executive Officers
  Available Information
 www.triplecrownmedia.com
 www.sec.gov
 
 Item 1A. Risk Factors
 Our flexibility is limited by the terms of our senior secured credit facility.
  
    
    limitations on liens;
    
    limitations on incurrence of debt;
    
    limitations on making dividends and distributions;
    
    provisions for mandatory prepayments;
    
    limitations on transactions with affiliates;
 16




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
    
    limitations on guarantees;
    
    limitations on asset sales;
    
    limitations on sale-leaseback transactions;
    
    limitations on acquisitions;
    
    limitations on changes in our business;
    
    limitations on mergers and other corporate reorganizations;
    
    limitations on loans, investments and advances, including investments in joint ventures
and foreign subsidiaries;
    
    financial ratio and condition tests; and
    
    increases in our cost of borrowings or inability or unavailability of additional debt
or equity capital.
  Servicing our debt will require a significant amount of cash, and our ability to generate
sufficient cash depends on many factors, some of which are beyond our control.
  We depend on the economies and the demographics of the local communities that our newspaper
publications serve and we are also susceptible to general economic downturns, which could adversely
affect our advertising and circulation revenue and our profitability.
  
    
    local economic conditions in general;
    
    the economic condition of the retail segments of the communities that our
publications serve;
    
    the popularity of our publications;
    
    the size and demographic characteristics of the local population;
    
    pricing fluctuations in local and national advertising;
    
    the activities of our competitors, including increased competition from other forms
of advertising-based mediums; and
    
    changing consumer lifestyles.
  17




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In the newspaper industry, we rely on advertising and paid circulation revenue, for which we
face competition from other newspapers, some significantly larger than us, as well as other
communications, media and web-based sources, and in the wireless industry, we rely on subscription
revenue, for which we face competition from both providers of traditional paging services as well
as providers of e-mail and similar services.
 Newspaper Industry.
 Wireless Industry.
 Any significant increases in newsprint costs could have a material adverse effect on our
operating results.
  We may be unable to identify or integrate acquisitions of daily and non-daily newspapers and
similar publications successfully or on commercially acceptable terms and such failure could
adversely affect our business, financial condition and results of operations.
 18




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
    
    diverting managements attention;
    
    incurring significant additional liabilities, capital expenditures, transaction and
operating expenses and non-recurring acquisition-related charges;
    
    experiencing an adverse impact on our earnings from the amortization or impairment
of acquired goodwill and other intangible assets;
    
    failing to integrate the operations, facilities and personnel of the acquired
newspapers and publications;
    
    entering new markets with which we are not familiar; and
    
    failing to retain key personnel of the acquired newspapers and publications.
   Our development of new publications for our markets is subject to risks and uncertainties, and
such new publications may not ultimately be successful.
  The continued decline in the number of paging units in service and the resulting decrease in
revenue from our GrayLink Wireless business could have an adverse effect on our future operating
results, financial position and cash flow, which could in turn impair the value of our common
stock.
  19




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Advances in technology could enable our competitors in wireless messaging to lower the prices
of their services and products to levels at which our pricing for our traditional paging services
and paging units would cease to be attractive.
  Changes in the regulations that govern our business might increase competition or make it more
difficult or costly to operate our business or comply with such changes.
    20




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We may be required to take an impairment charge on our goodwill, which may have a material
effect on the value of our total assets.
  We may incur significant capital and operating expenditures to achieve and maintain compliance
with applicable environmental laws and regulations, or associated with environmental liabilities,
and if such expenses significantly exceed our expectations, our operating income may be adversely
affected.
  Our Collegiate Marketing and Production Services business derives a significant portion of its
revenue from short-term agreements for the provision of sports and marketing services and the
inability to renew or extend these agreements may adversely affect our revenues.
  Our business relies on contracts with NCAA Division I universities and athletic conferences
and our inability to renew or extend these contracts would adversely affect our revenues.
 21




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We may lose money on some of our contracts because they provide for the payment of a
guaranteed rights fee to other parties.
  Our Association Management business is not an accredited association management company by,
for example, the American Society of Association Executives Accreditation Program, and our
inability to become accredited could have an adverse impact on our ability to maintain our current
contracts or secure future association management business.
  Our failure to maintain continuing relationships with the NCAA, university athletic directors
and coaches, and the associations with which we do business may diminish our revenues.
  The seasonal nature of our Collegiate Marketing and Production Services business could
adversely affect our quarterly results.
  22




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Our Collegiate Marketing and Production Services business is very competitive and some of our
competitors have greater financial and other resources that may prevent us from capturing new
markets or expanding our presence in its current markets.
  Our success depends on our senior management.
  Our historical financial information may not be representative of our results, as our
Newspaper Publishing and GrayLink Wireless businesses previously operated as subsidiaries or
divisions of Gray.
  
    
    in preparing this historical financial information, adjustments and allocations were
made because Gray did not account for these businesses as, and these businesses never
operated as, a stand-alone business for any periods presented until the Spin-off on
December 30, 2005; and
    
    the information does not reflect many changes that have occurred in our funding and
operations as a result of the Spin-off and the Merger.
 The agreements governing our relationship with Gray following the Spin-off were negotiated
while we were a subsidiary of Gray and, as a result, we cannot assure you that the agreements are
on terms favorable to us.
  After the separation, certain members of management and directors of Gray and TCM, who are
also shareholders of both companies, may face issues with respect to their relationships with Gray
and TCM when the interests of Gray and TCM are not aligned or with respect to the allocation of
their time between Gray and TCM.
  23




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The market price for our common stock may be volatile and stockholders may not be able to sell
our common stock at a favorable price or at all.
  
    
    variations in our quarterly results;
    
    announcements of technological innovations by us or by our competitors;
    
    introductions of new products or new pricing policies by us or by our competitors;
    
    acquisitions or strategic alliances by us or by our competitors;
    
    recruitment or departure of key personnel;
    
    the gain or loss of significant customers;
    
    changes in the estimates of our operating performance or changes in recommendations
by any securities analysts that elect to follow our common stock; and
    
    market conditions in our industry, the industries of our customers, and the economy
as a whole.
  Change in control provisions could make it more difficult for a third party to acquire us and
discourage a takeover, even when such attempts may be in the best interests of our stockholders or
on terms where our stockholders may be able to receive a premium for their shares over then current
market prices.
  
 Item 1B. Unresolved Staff Comments
  24




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Item 2. Properties
  Newspaper Publishing Segment
 LeaseOwned or
    
    Approximate
    
    
    ExpirationProperty Location
    
    Use
    
    Leased
    
    Size (Sq. Ft.)
    
    
    DateAlbany, GA
    
    Offices and production facility for
    
    Owned
    
    
    83,000
    
    
    n/aThe Albany HeraldConyers, GA
    
    Offices for Rockdale Citizen
    
    Owned
    
    
    20,000
    
    
    n/aConyers, GA
    
    Warehouse
    
    Leased
    
    
    9,600
    
    
    3/08Covington, GA
    
    Offices for Newton Citizen
    
    Leased
    
    
    3,750
    
    
    4/07Duluth, GA
    
    Circulation distribution center
    
    Leased
    
    
    7,866
    
    
    8/08Lawrenceville, GA
    
    Offices and production facility
    
    Leased
    
    
    72,000
    
    
    10/13for Gwinnett Daily PostandRockdale Citizen/Newton CitizenBethlehem, GA
    
    Circulation distribution center
    
    Leased
    
    
    5,600
    
    
    6/09Jonesboro, GA
    
    Offices and production facility
    
    Owned
    
    
    19,275
    
    
    n/afor Clayton News Daily, HenryDaily Herald and JacksonProgress-ArgusJackson, GA
    
    Offices for Jackson Progress-Argus
    
    Owned
    
    
    3,096
    
    
    n/aMcDonough, GA
    
    Offices for Henry Daily Herald
    
    Leased
    
    
    2,400
    
    
    12/08
 Collegiate Marketing and Production Services and Association Management Segments
 LeaseOwned or
    
    Approximate
    
    
    ExpirationProperty Location
    
    Use
    
    Leased
    
    Size (Sq. Ft.)
    
    
    DateLexington, KY
    
    Offices, warehouse and
    
    Owned
    
    
    25,000
    
    
    n/aproduction facility Host Printingand publishing divisionsLexington, KY
    
    Offices (2 locations)
    
    Leased
    
    
    41,000
    
    
    4/07
  GrayLink Wireless Business
 LeaseOwned or
    
    Approximate
    
    
    ExpirationProperty Location
    
    Use
    
    Leased
    
    Size (Sq. Ft.)
    
    
    DateTallahassee, FL
    
    Corporate offices
    
    Leased
    
    
    3,094
    
    
    3/07
  25




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Item 3. Legal Proceedings
 Sarkes Tarzian, Inc. v. Bull Run Corporation and Gray Television, Inc.
    
 Item 4. Submission of Matters to a Vote of Security Holders
  26




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PART II
 
 Item 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
 Market Information
   Quarter Ended
    
    High
    
    
    LowFiscal 2006March 31, 2006
    
    $
    12.00
    
    
    $
    5.66June 30, 2006
    
    $
    8.67
    
    
    $
    5.00Fiscal 2005December 31, 2006
    
    $
    15.50
    
    
    $
    11.01
  Dividends
  Restrictions on Resales by Affiliates
  
    
    the further registration under the Securities Act of 1933, as amended, or the
Securities Act, of the transfer of shares of our common stock by any such affiliate;
    
    compliance with Rule 145 promulgated under the Securities Act (permitting limited sales
under certain circumstances); or
    
    the availability of another exemption from registration.
  Recent Sales of Unregistered Securities
  27




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Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  Equity Compensation Plan Information
  
 Item 6. Selected Financial Data
  28




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Statement of Operations Data:
(Dollars in thousands, except per share data)
 Six MonthsYear Ended December 31, (1)
    
    
    Ended June 30,2001
    
    
    2002(2)
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006Operating revenues
    
    $
    43,340
    
    
    $
    45,173
    
    
    $
    45,553
    
    
    $
    46,919
    
    
    $
    47,857
    
    
    $
    54,379Operating income
    
    
    6,039
    
    
    
    9,779
    
    
    
    9,868
    
    
    
    9,761
    
    
    
    5,767
    
    
    
    4,613Cumulative effect of accounting change, net of
income tax benefit of $4,541 (2)
    
    
    
    
    
    
    (7,423
    )Earnings (loss) from continuing operations
    
    
    3,054
    
    
    
    (1,982
    )
    
    
    6,193
    
    
    
    6,157
    
    
    
    3,429
    
    
    
    (1,560
    )Income from discontinued operations, net of tax
    
    
    929
    
    
    
    1,158
    
    
    
    736
    
    
    
    1,098
    
    
    
    988
    
    
    
    271Gain on disposal of discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,685Net income
    
    
    3,983
    
    
    
    (824
    )
    
    
    6,929
    
    
    
    7,255
    
    
    
    4,417
    
    
    
    4,396Net income available to common stockholders
    
    
    3,983
    
    
    
    (824
    )
    
    
    6,929
    
    
    
    7,255
    
    
    
    4,414
    
    
    
    3,854Basic and diluted net income (loss) per common share (3)Earnings (loss) from continuing operations
    
    $
    0.63
    
    
    $
    (0.41
    )
    
    $
    1.27
    
    
    $
    1.26
    
    
    $
    0.70
    
    
    $
    (0.30
    )Income from discontinued operations
    
    $
    0.19
    
    
    $
    0.24
    
    
    $
    0.15
    
    
    $
    0.23
    
    
    $
    0.20
    
    
    $
    0.05Gain on disposal of discontinued operations, net of tax
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1.11Net income
    
    $
    0.82
    
    
    $
    (0.17
    )
    
    $
    1.42
    
    
    $
    1.49
    
    
    $
    0.91
    
    
    $
    0.86Net income available to common stockholders
    
    $
    0.82
    
    
    $
    (0.17
    )
    
    $
    1.42
    
    
    $
    1.49
    
    
    $
    0.91
    
    
    $
    0.75
 
 (1)
    
    Operating revenues and income have been adjusted for discontinued operations of The
Goshen News discussed elsewhere in the Form 10-K. See footnote 11 for further
information.(2)
    
    Upon adoption of Statement of Financial Accounting Standard No. 142, Goodwill and
Other Intangible Assets, we recorded a non-cash charge of approximately $11.9 million
($7.4 million after income taxes) as a cumulative effect of accounting change.(3)
    
    For the years ended December 31, 2001, 2002, 2003, and 2004 and the period January 1
to December 30, 2005, the (basic and diluted) income from continuing operations per share
gives effect to the issuance of 4,870,000 shares of our common stock in the Spin-off as if
it had occurred at the beginning of the periods presented. For the day of December 31,
2005, 5,128,000 shares of our common stock were assumed to be outstanding, including
258,000 shares to be issued in exchange for shares of Bull Run common stock. Average
shares outstanding for the six months ended June 30, 2006 were 5,138,775.  Balance Sheet Data:
(Dollars in thousands)
 As of December 31,
    
    
    As of June 30,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005
    
    
    2006Total assets
    
    $
    50,825
    
    
    $
    37,696
    
    
    $
    37,818
    
    
    $
    39,240
    
    
    $
    171,029
    
    
    $
    163,575Long-term debt
(including current
portion)
    
    
    186
    
    
    
    124
    
    
    
    56
    
    
    
    0
    
    
    
    121,939
    
    
    
    119,276Owners net
investment / Stockholders
equity (deficit)
    
    
    40,509
    
    
    
    30,375
    
    
    
    29,254
    
    
    
    29,800
    
    
    
    (7,210
    )
    
    
    (2,714
    )
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Executive Overview
 Introduction
  Change in Year End
  29




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Merger
   Overview
  30




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Discontinued Operations
 31




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Six MonthsFor the Year Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Operating Revenue
    
    $
    5,749
    
    
    $
    5,964
    
    
    $
    5,966
    
    
    $
    1,417Operating Income
    
    
    1,247
    
    
    
    1,770
    
    
    
    1,614
    
    
    
    445Net Income
    
    
    736
    
    
    
    1,098
    
    
    
    988
    
    
    
    271
 Newspaper Publishing, GrayLink Wireless and Other Revenues
  32




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(Dollars in thousands)
 Year Ended December 31,
    
    
    Six Months Ended2003
    
    
    2004
    
    
    2005
    
    
    June 30, 2006Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Publishing:Retail
    
    $
    19,997
    
    
    
    43.9
    %
    
    $
    21,425
    
    
    
    45.7
    %
    
    $
    23,057
    
    
    
    48.2
    %
    
    $
    11,882
    
    
    
    21.9
    %Classifieds
    
    
    11,438
    
    
    
    25.1
    %
    
    
    11,997
    
    
    
    25.6
    %
    
    
    12,672
    
    
    
    26.5
    %
    
    
    7,500
    
    
    
    13.8
    %Circulation
    
    
    4,643
    
    
    
    10.2
    %
    
    
    4,620
    
    
    
    9.8
    %
    
    
    4,264
    
    
    
    8.9
    %
    
    
    2,195
    
    
    
    4.0
    %Other
    
    
    592
    
    
    
    1.3
    %
    
    
    748
    
    
    
    1.6
    %
    
    
    244
    
    
    
    0.5
    %
    
    
    470
    
    
    
    0.9
    %$
    36,670
    
    
    
    80.5
    %
    
    $
    38,790
    
    
    
    82.7
    %
    
    $
    40,237
    
    
    
    84.1
    %
    
    $
    22,047
    
    
    
    40.5
    %Collegiate Marketing &
Production Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    97
    
    
    
    0.2
    %
    
    $
    24,174
    
    
    
    44.5
    %Association Management
Services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    16
    
    
    
    0.0
    %
    
    $
    4,701
    
    
    
    8.6
    %Wireless:Lease, sales and
service
    
    $
    8,883
    
    
    
    19.5
    %
    
    $
    8,129
    
    
    
    17.3
    %
    
    $
    7,507
    
    
    
    15.7
    %
    
    $
    3,457
    
    
    
    6.4
    %Total Revenues
    
    $
    45,553
    
    
    
    100.0
    %
    
    $
    46,919
    
    
    
    100.0
    %
    
    $
    47,857
    
    
    
    100.0
    %
    
    $
    54,379
    
    
    
    100.0
    %
 Results of Operations
 Six Months Ended June 30, 2006 compared to Six Months Ended June 30, 2005
  Revenues.
 
    
    Newspaper Publishing revenues increased 11% to approximately $22.0 million in 2006
compared to approximately $19.8 million for the six months ended June 30, 2005. An
increase in classified advertising revenue of 16% was the primary contributor to the
increase in Newspaper Publishing revenues. The increase in classified advertising was
primarily driven by legal advertising. Retail advertising increased 7% with gains at
The Gwinnett Daily Post partially offset by the decline in the Albany market.
Circulation revenue increased 5% reflecting strength at The Gwinnett Daily Post.
    
    Collegiate Marketing and Production Services revenue increased 8% to approximately
$24.2 million for the six months ended June 30, 2006 compared to approximately $22.3
million for the six months ended June 30, 2005. Advertising revenue increased $1.6
million primarily due to increased advertising sales of approximately $1.2 million at
our university related properties and $0.4 million for our NCAA division. Collegiate
advertising revenue increased due to significant additional marketing rights gained in
contract renewals at two of our university properties as well as smaller increases
across our other university related properties. Product sales and other revenue
accounted for the remainder of the increase offset partially by declines in production
services.
    
    Association Management revenue increased 9% to approximately $4.7 million for the six
months ended June 30, 2006 compared to approximately $4.3 million for the six months
ended June 30, 2005. Management fees increased by approximately $0.3 million due
primarily to the addition of an association to our association management portfolio.
 33




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##### Table of Contents



Advertising revenue increased approximately $0.1 million related to increased
publication volume.
    
    Graylink Wireless revenue decreased 15% to approximately $3.5 million for the six
months ended June 30, 2006 compared to approximately $4.1 million for the six months
ended June 30, 2005. Paging revenue decreased approximately $0.5 million as pagers in
service decreased from approximately 36,000 to approximately 29,000 units as of June 30,
2005 and 2006, respectively.
 Operating Expenses. .
 
    
    Newspaper Publishing expenses, before depreciation and amortization, increased 8% to
approximately $15.8 million for the six months ended June 30, 2006 compared to
approximately $14.7 million for the six months ended June 30, 2005.
 
    
    Newsprint expense increased 9% to approximately $2.9
million for the six months ended June 30, 2006 compared to $2.5
million for the six months ended June 30, 2005. The increase in
newsprint expense was primarily due to the increase in the average
cost per metric ton of
standard newsprint by $72 for the six months ended June 30, 2006
compared to the six months ended June 30, 2005. Total usage was
approximately 3,960 metric tons during the six months ended June 30,
2006 compared to 4,530 metric tons during the six months ended June 30,
2005.
    
    Payroll expense increased 7% to approximately $7.7
million for the six months ended June 30, 2006 compared to
approximately $7.2 million for the six months ended June 30, 2005.
    
    Newspaper Publishing transportation service costs,
which are primarily outsourced, increased 16% to approximately $2.2
million for the six months ended June 30, 2006 compared to
approximately $1.9 million for the six months ended June 30, 2005.
The increase in expense was primarily the result of increases in fuel
costs.
 
    
    Collegiate Marketing and Production Services expenses, before depreciation and
amortization, increased 1% to approximately $22.4 million for the six months ended June
30, 2006 compared to approximately $22.1 million for the six months ended June 30, 2005.
 
    
    Guaranteed rights fees expense increased 20% to $9.9
million for the six months ended June 30, 2006 compared to $8.2
million for the six months ended June 30, 2005. The increase was
primarily due to increases in guaranteed rights fees related to two
new contracts with significant additional marketing rights.
    
    Commissions expense decreased 61% to approximately $0.3
million for the six months ended June 30, 2006 compared to $0.9
million for the six months ended June 30, 2005. Due to a change in
accounting period, commissions earned prior to January 1, 2005 were
properly recorded during the Bull Run quarter ended February 2005
causing the six months ended June 30, 2005 presented in these
financial statements to reflect commissions earned in a prior period
resulting in substantially all of the decrease Commissions recorded
for the six months ended June 30, 2006 correspond with the associated
revenue for 2006.
    
    Corporate overhead related expenses decreased
approximately $0.5 million for the six months ended June 30, 2006.
These costs were moved to Corporate expenses recorded by Triple Crown
Media.
 34




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##### Table of Contents




    
    Association Management expenses, before depreciation and amortization,
increased 14% to approximately $3.5 million for the six months ended June 30,
2006 compared to $3.0 million for the six months ended June 30, 2005.
 
    
    Payroll and related expenses increased 21% to
approximately $2.2 million for the six months ended June 30, 2006
compared to approximately $1.8 million for the six months ended June
30, 2005. The increase was primarily due to increased personnel to
manage a new association added to our portfolio late in the same
period of 2005.
 
    
    Graylink Wireless expenses were flat at approximately $3.0 million for the
six months ended June 30, 2006 compared to $3.0 million for the six months
ended June 30, 2005. Reduced expenses related to cost savings initiatives
were offset by increases in cost of sales related to cell phones with newer,
more expensive features during the six months ended June 30, 2006.
    Interest Expense.
 Debt issue cost amortization.
 Income tax expense.
 35




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##### Table of Contents



Discontinued operations.
 Year Ended December 31, 2005 compared to Year Ended December 31, 2004
 Revenues.
 
    
    Newspaper Publishing revenues increased 4% to approximately $40.2 million for the year
ended December 31, 2005 compared to approximately $38.8 million for the year ended December
31, 2004. Retail advertising revenue and classified advertising revenue increased 8% and
6%, respectively, and were the primary contributors to the increase in Newspaper Publishing
revenues. The increase in retail advertising revenue was due largely to a combination of
account development and readership growth at The Gwinnett Daily Post and Rockdale/Newton
Citizen. Of the total increase in retail advertising, approximately $1.4 million of the
aggregate increase in retail advertising is attributable to an expansion by 40,000 copies
of the Sunday edition of The Gwinnett Daily Post beginning in August 2004. The increase in
classified advertising revenue was due to increases in help wanted advertisements.
Circulation revenue decreased 8% primarily reflecting a decrease in the number of
subscriptions at our newspapers, excluding The Gwinnett Daily Post.
    
    GrayLink Wireless revenue decreased 8% to approximately $7.5 million for the year ended
December 31, 2005 compared to $8.1 million for the year ended December 31, 2004. Our
GrayLink Wireless business had approximately 33,000 and 40,000 pagers in service at
December 31, 2005 and 2004, respectively. The number of pagers in service decreased as a
result of increased competition from other communication services and products such as
cellular telephones. The number of pagers in service has declined over the past several
years. The decrease in revenue from the sale and leasing of pagers has been partially
offset by reselling cellular telephone services. Paging revenue, excluding revenue from
reselling cellular telephone services, accounted for approximately $4.1 million of total
GrayLink Wireless revenue in 2005 compared to approximately $5.1 million in 2004. The trend
of declining GrayLink paging revenue is expected to continue in the future.
 Operating expenses.
  
    
    Newsprint expenses increased 8% to approximately $5.2 million. The increase in
newsprint expense was primarily due to the increase in average cost per metric ton of
standard newsprint by $30 per metric ton since December 31, 2004. Total usage was
approximately 11,800 metric tons in 2005. The $30 per metric ton average price increase
resulted in approximately $0.6 million of the increase in newsprint costs in 2005 compared
to 2004.
    
    Newspaper Publishing payroll expenses increased 2% to approximately $10.7 million.
    
    Newspaper Publishing transportation service costs, which are primarily outsourced,
increased 11% to approximately $4.0 million in the year ended December 31, 2005 compared to
approximately $3.6 million for the year ended December 31, 2004. The increase between the
periods reflects general increases in fuel costs and the expanded distribution of the
Sunday edition of The Gwinnett Daily Post, both of which resulted in higher rates paid to
independent contractors.
 36




---



##### Table of Contents




    
    Newspaper Publishing repairs and maintenance expense increased 64% to approximately
$0.4 million in the year ended December 31, 2005 compared to approximately $0.3 million for
the year ended December 31, 2004. The increase in expense was primarily the result of
repairs to a printing press and other production equipment at The Gwinnett Daily Post and
Albany Herald.
    Income tax expense.
 Discontinued operations.
 Year Ended December 31, 2004 compared to Year Ended December 31, 2003
 Revenues.
 
    
    Newspaper Publishing revenues increased 6% to approximately $38.8 million. Retail
advertising revenue and classified advertising revenue increased 7% and 5%, respectively
and were the primary contributors to the increase in these revenues. The increase in retail
advertising revenue was due largely to a combination of account development and readership
growth at The Gwinnett Daily Post. Approximately 53% of the total increase in retail
advertising, was attributable to new advertising accounts developed at the Gwinnett Daily
Post and an additional 39% of the aggregate increase in retail advertising was attributable
to an expansion by 40,000 copies of the Sunday edition of the same paper beginning in
August 2004. The increase in classified advertising revenue was due to increases in help
wanted advertisements.
    
    GrayLink Wireless revenue decreased 8% to approximately $8.1 million. The decrease was
due primarily to price competition and a reduction of units in service. Our GrayLink
Wireless business had approximately 40,000 and 53,000 pagers in service at December 31,
2004 and 2003, respectively. The number of pagers in service decreased as a result of
increased competition from other communication services and products such as cellular
telephones. The number of pagers in service has declined over the past several years. The
decrease in revenue from the sale and leasing of pagers has been partially offset by
reselling cellular telephone services, which accounted for approximately $2.2 million of
revenue in 2004 compared to $1.8 million in 2003.
 Operating expenses.
 37




---



##### Table of Contents




    
    Newsprint expenses increased 20% to approximately $4.8 million. The increase in newsprint
expense was primarily due to the increase in average cost per metric ton of standard
newsprint by $51 per metric ton over the course of 2004. Total usage was approximately
10,260 metric tons and the $51 per metric ton average price increase represents
approximately $0.6 million of the increase in newsprint costs. The expansion of the Sunday
delivery of The Gwinnett Daily Post by approximately 40,000 copies beginning in August 2004
also contributed to the increase in newsprint by approximately $143,000.
    
    Newspaper Publishing long term lease expense totaled approximately $0.4 million and $0.3
million for the years ended December 31, 2004 and 2003, respectively. The increase in long
term lease expense was the result of a real property lease for the new printing plant net of
a sublease for the previous facility.
    
    Newspaper Publishing bad debt expense totaled approximately $0.3 million and $0.1 million
for the years ended December 31, 2004 and 2003, respectively. The increase in bad debt
expense was primarily the result of several larger advertisers becoming uncollectible in
2004 due to bankruptcy filings.
     Income tax expense.
 Discontinued operations.
 Liquidity and Capital Resources
 General
  38




---



##### Table of Contents



(Dollars in thousands)
 Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Net cash provided by continuing operations
    
    $
    8,960
    
    
    $
    8,289
    
    
    $
    8,659
    
    
    $
    3,028Net cash provided by discontinued operations
    
    
    1,423
    
    
    
    1,913
    
    
    
    770
    
    
    
    491Net cash used in investing activities
    
    
    (1,828
    )
    
    
    (3,321
    )
    
    
    (74,635
    )
    
    
    (1,069
    )Net cash provided by (used in) financing activities
    
    
    (8,118
    )
    
    
    (6,765
    )
    
    
    65,995
    
    
    
    (3,710
    )Net increase in cash and cash equivalents
    
    $
    437
    
    
    $
    116
    
    
    $
    789
    
    
    $
    (1,260
    )
 (Dollars in thousands)
    
    December 31,
    
    
    December 31,
    
    
    June 30,2004
    
    
    2005
    
    
    2006Cash and cash equivalents
    
    $
    644
    
    
    $
    1,433
    
    
    $
    173Long-term debt, including current portion
    
    $
    0
    
    
    $
    121,939
    
    
    $
    119,276
 Six Months Ended June 30, 2006 compared to the Six Months Ended June 30, 2005
    Year Ended December 31, 2005 compared to Year Ended December 31, 2004
    Year Ended December 31, 2004 compared to Year Ended December 31, 2003
 39




---



##### Table of Contents



Off-Balance Sheet Arrangements
     Contractual Obligations as of June 30, 2006
 (Dollars in thousands)
    
    Payment Due by PeriodYear
    
    
    Years
    
    
    Years
    
    
    More ThanContractual Obligations
    
    Total
    
    
    1
    
    
    2-3
    
    
    4-5
    
    
    5 YearsLong-term debt obligations
    
    $
    119,276
    
    
    $
    900
    
    
    $
    1,800
    
    
    $
    116,576
    
    
    $
    Interest obligations (1)
    
    
    46,159
    
    
    
    11,865
    
    
    
    23,493
    
    
    
    10,801
    
    
    
    Operating lease obligations (2)
    
    
    6,387
    
    
    
    1,989
    
    
    
    2,138
    
    
    
    1,528
    
    
    
    733Purchase obligations (3)
    
    
    108,013
    
    
    
    18,675
    
    
    
    27,661
    
    
    
    19,084
    
    
    
    42,593$
    279,835
    
    
    $
    33,429
    
    
    $
    55,092
    
    
    $
    147,989
    
    
    $
    43,326
 
 (1)
    
    Interest obligations assume the current contract LIBOR rate in effect at the date
of this Form 10-K, as adjusted for the fixed interest rate under the interest rate swap
agreement for the period during which the interest rate swap agreement 40




---



##### Table of Contents



for the period during which the interest rate swap agreement will be effective. Interest obligations are presented through the maturity dates of each
component of the credit facilities.(2)
    
    Operating lease obligations represent payment obligations under non-cancelable
lease agreements classified as operating leases and disclosed pursuant to Statements of
Financial Accounting Standards No. 13, Accounting for Leases, as may be modified or
supplemented. These amounts are not recorded as liabilities as of the current balance
sheet date. Operating lease obligations are presented net of future receipts on
contracted sublease arrangements totaling approximately $0.8 million as of June 30,
2006.(3)
    
    Purchase obligations primarily consist of future guaranteed rights fee
commitments to associations or institutions under contractual arrangements of typically
three to ten years, which expire at varying times through 2016.
       41




---



##### Table of Contents



Subsequent Events
   Working Capital
  Certain Relationships
  42




---



##### Table of Contents



Critical Accounting Policies
  Revenue Recognition and Rights Fee Expenses
    43




---



##### Table of Contents



Valuation and Impairment Testing of Intangible Assets
      44




---



##### Table of Contents



Deferred Income Taxes
  Transactions with Related Parties
  Recent Accounting Pronouncements
 Accounting Changes and Corrections of Errors
 Share Based Payments 
 Accounting for Uncertainty in Income Taxes 
 45




---



##### Table of Contents



Interest Rate and Market Rate Risk
   Forward-Looking Statements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
  46




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
  PageReport of Independent Registered Public Accounting Firm  BDO
Seidman, LLP
    
    
    48Report of Independent Registered Public Accounting Firm 
PricewaterhouseCoopers LLP
    
    
    49Consolidated Balance Sheets as of December 31, 2005 and June 30, 2006
    
    
    50Combined Statements of Operations for the years ended December 31, 2003 and
2004, and Consolidated Statements of
    
    
    51Operations for the year ended
December 31, 2005 and the six months ended June 30, 2006Combined Statements of Stockholders Equity for the years ended December 31,
2003 and 2004, and Consolidated
    
    
    52Statements of Stockholders Equity (Deficit)
And Comprehensive Income for the year ended December 31, 2005 and the
six months ended June 30, 2006Combined Statements of Cash Flows for the years ended December 31, 2003 and
2004, and Consolidated Statements
    
    
    53of Cash Flows for the year ended
December 31, 2005 and the six months ended June 30, 2006Notes to the Combined and Consolidated Financial Statement
    
    
    54
 47




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
  
   
 48




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
   
 49




---



##### Table of Contents



TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    June 30,2005
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,433
    
    
    $
    173Accounts receivable, less allowance for doubtful accounts of
$492 and $434, respectively
    
    
    22,632
    
    
    
    11,412Inventories
    
    
    1,668
    
    
    
    1,498Other current assets
    
    
    1,176
    
    
    
    1,949Current assets of business held for sale
    
    
    622Total current assets
    
    
    27,531
    
    
    
    15,032Property and equipment:Land
    
    
    1,848
    
    
    
    1,993Buildings and improvements
    
    
    6,736
    
    
    
    7,737Equipment
    
    
    19,809
    
    
    
    19,77728,393
    
    
    
    29,507Accumulated depreciation
    
    
    (16,106
    )
    
    
    (16,457
    )12,287
    
    
    
    13,050Goodwill
    
    
    73,730
    
    
    
    87,475Other intangible assets, net
    
    
    18,493
    
    
    
    24,917Deferred income taxes
    
    
    19,191
    
    
    
    16,193Other assets
    
    
    6,478
    
    
    
    6,908Non-current assets of business held for sale
    
    
    13,319Total assets
    
    $
    171,029
    
    
    $
    163,575LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS EQUITY (DEFICIT)Current liabilities:Current portion of long-term debt
    
    $
    2,839
    
    
    $
    900Accounts payable
    
    
    5,877
    
    
    
    3,849Accrued expenses
    
    
    15,205
    
    
    
    11,450Accrued fees payable to Gray Television, Inc.
    
    
    3,034
    
    
    
    3,420Accrued distribution payable to Gray Television, Inc.
    
    
    647Federal and state income taxes
    
    
    
    
    
    
    76Deferred revenue
    
    
    6,436
    
    
    
    4,576Liabilities of business held for exchange
    
    
    685Total current liabilities
    
    
    34,723
    
    
    
    24,271Long-term debt
    
    
    119,100
    
    
    
    118,376Other liabilities
    
    
    3,275
    
    
    
    2,332Series B redeemable preferred stock, $.001 par value (authorized 20,000
shares; issued and outstanding 6,050 shares; $6,050 liquidation value)
    
    
    4,380
    
    
    
    4,425Total liabilities
    
    
    161,478
    
    
    
    149,404Series A redeemable, convertible preferred stock, $.001 par value (authorized 50,000
shares; issued and outstanding 20,890 shares; $20,890 liquidation value)
    
    
    16,761
    
    
    
    16,885Commitments and contingenciesStockholders Equity (Deficit):Common stock, par value $0.001 (authorized 25,000 shares, issued and
outstanding (5,129 and 5,187 shares, respectively)
    
    
    5
    
    
    
    5Additional paid-in capital
    
    
    3,211
    
    
    
    3,453Accumulated deficit
    
    
    (10,426
    )
    
    
    (6,572
    )Accumulated other comprehensive income, net of tax
    
    
    
    
    
    
    400Total stockholders equity (deficit)
    
    
    (7,210
    )
    
    
    (2,714
    )Total liabilities, preferred stock and stockholders equity (deficit)
    
    $
    171,029
    
    
    $
    163,575
 
 50




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TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS
 Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Operating revenues:Publishing
    
    $
    36,670
    
    
    $
    38,790
    
    
    $
    40,237
    
    
    $
    22,047Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    24,174Association management services
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    4,701Wireless
    
    
    8,883
    
    
    
    8,129
    
    
    
    7,507
    
    
    
    3,45745,553
    
    
    
    46,919
    
    
    
    47,857
    
    
    
    54,379Expenses:Operating expenses before depreciation, amortizationand loss on disposal of assets, net:Publishing
    
    
    25,682
    
    
    
    27,716
    
    
    
    30,304
    
    
    
    15,829Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    22,370Association management services
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    3,472Wireless
    
    
    6,625
    
    
    
    6,433
    
    
    
    6,336
    
    
    
    2,965Corporate and administrative
    
    
    1,201
    
    
    
    1,209
    
    
    
    1,117
    
    
    
    2,594Depreciation
    
    
    1,667
    
    
    
    1,386
    
    
    
    1,436
    
    
    
    1,130Amortization and impairment of intangible assets
    
    
    125
    
    
    
    5
    
    
    
    3,216
    
    
    
    1,406Loss (gain) on disposal of assets, net
    
    
    385
    
    
    
    409
    
    
    
    (432
    )
    
    
    35,685
    
    
    
    37,158
    
    
    
    42,090
    
    
    
    49,766Operating income
    
    
    9,868
    
    
    
    9,761
    
    
    
    5,767
    
    
    
    4,613Other income (expense):Interest expense related to Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (226
    )Interest expense, other
    
    
    (30
    )
    
    
    (3
    )
    
    
    (236
    )
    
    
    (5,917
    )Debt issue cost amortization
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (608
    )Miscellaneous income, net
    
    
    53
    
    
    
    37Income (loss) from continuing operations before income taxes
    
    
    9,891
    
    
    
    9,795
    
    
    
    5,527
    
    
    
    (2,138
    )Income tax expense (benefit)
    
    
    3,698
    
    
    
    3,638
    
    
    
    2,098
    
    
    
    (578
    )Earnings (loss) from continuing operations
    
    
    6,193
    
    
    
    6,157
    
    
    
    3,429
    
    
    
    (1,560
    )Income from discontinued operations, net of tax
    
    
    736
    
    
    
    1,098
    
    
    
    988
    
    
    
    271Gain on disposal of discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,685Net income (loss)
    
    
    6,929
    
    
    
    7,255
    
    
    
    4,417
    
    
    
    4,396Series A preferred stock dividends accrued
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (542
    )Net income (loss) available to common stockholders
    
    $
    6,929
    
    
    $
    7,255
    
    
    $
    4,414
    
    
    $
    3,854Basic and diluted per share information:Earnings (loss) from continuing operations
    
    $
    1.27
    
    
    $
    1.26
    
    
    $
    0.70
    
    
    $
    (0.30
    )Income from discontinued operations
    
    $
    0.15
    
    
    $
    0.23
    
    
    $
    0.20
    
    
    $
    0.05Gain on disposal of discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1.11Net income
    
    $
    1.42
    
    
    $
    1.49
    
    
    $
    0.91
    
    
    $
    0.86Net income available to common stockholders
    
    $
    1.42
    
    
    $
    1.49
    
    
    $
    0.91
    
    
    $
    0.75Weighted average shares outstanding
    
    
    4,870
    
    
    
    4,870
    
    
    
    4,871
    
    
    
    5,139
 
 51




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##### Table of Contents



TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND COMPREHENSIVE INCOME
 Accumulated
    
    
    
    
    
    
    CurrentAdditional
    
    
    
    
    
    
    Other
    
    
    Total
    
    
    YearOwner's Net
    
    
    Common
    
    
    Paid-In
    
    
    Accumulated
    
    
    Comprehensive
    
    
    Stockholders'
    
    
    ComprehensiveInvestment
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Income, Net
    
    
    Equity (Deficit)
    
    
    IncomeBalance as of January 1, 2003
    
    $
    30,375
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    30,375Net income
    
    
    6,929
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,929Net transfers to Gray Television, Inc.
    
    
    (8,050
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,050
    )Balance as of December 31, 2003
    
    
    29,254
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,254Net income
    
    
    7,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,255Net transfers to Gray Television, Inc.
    
    
    (6,709
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,709
    )Balance as of December 31, 2004
    
    
    29,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,800Net income
    
    
    4,482
    
    
    
    
    
    
    
    
    
    
    
    (65
    )
    
    
    
    
    
    
    4,417Net transfers to Gray Television, Inc.
    
    
    (4,895
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,895
    )Common stock issued in Spin-off (4,870
shares)
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Increase in deferred income taxes for
Grays tax gain on Spin-off
    
    
    4,855
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,855Distribution to Gray under terms of Spin-off
    
    
    (44,600
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44,600
    )Reclassify owners net investment to
accumulated deficit
    
    
    10,358
    
    
    
    
    
    
    
    
    
    
    
    (10,358
    )
    
    
    
    
    
    
    Common stock issued in Merger transaction
(258 shares)
    
    
    
    
    
    
    0
    
    
    
    3,211
    
    
    
    
    
    
    
    
    
    
    
    3,211Series A preferred dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Balance as of December 31, 2005
    
    $
    0
    
    
    $
    5
    
    
    $
    3,211
    
    
    $
    (10,426
    )
    
    
    
    
    
    $
    (7,210
    )Issuance of restricted stock
    
    
    
    
    
    
    0
    
    
    
    20
    
    
    
    
    
    
    
    
    
    
    
    20Issuance of common stock to 401K plan
    
    
    
    
    
    
    0
    
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    157Issuance of stock options
    
    
    
    
    
    
    
    
    
    
    65
    
    
    
    
    
    
    
    
    
    
    
    65Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,396
    
    
    
    
    
    
    
    4,396
    
    
    
    4,396Series A preferred dividends accrued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (542
    )
    
    
    
    
    
    
    (542
    )Net change in accumulated other
comprehensive income, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    400
    
    
    
    400
    
    
    
    400Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,796Balance as of June 30, 2006
    
    $
    0
    
    
    $
    5
    
    
    $
    3,453
    
    
    $
    (6,572
    )
    
    $
    400
    
    
    $
    (2,714
    )
 
 52




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##### Table of Contents



TRIPLE CROWN MEDIA, INC.
COMBINED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
 Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Operating activities:Net income (loss)
    
    $
    6,929
    
    
    $
    7,255
    
    
    $
    4,417
    
    
    $
    4,396Income from discontinued operations, net of tax
    
    
    (736
    )
    
    
    (1,098
    )
    
    
    (988
    )
    
    
    (271
    )Gain on disposal of discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,685
    )Income (loss) from continuing operations
    
    $
    6,193
    
    
    $
    6,157
    
    
    $
    3,429
    
    
    $
    (1,560
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Depreciation
    
    
    1,667
    
    
    
    1,386
    
    
    
    1,436
    
    
    
    1,130Amortization and impairment charges
    
    
    125
    
    
    
    5
    
    
    
    3,219
    
    
    
    2,014Interest accrued on redeemable preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    226Loss (gain) on disposal of assets, net
    
    
    386
    
    
    
    403
    
    
    
    (432
    )
    
    
    Stock compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85Issuance of common stock to 401K plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    157Deferred income taxes
    
    
    865
    
    
    
    1,121
    
    
    
    (403
    )
    
    
    (2,998
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (196
    )
    
    
    (306
    )
    
    
    191
    
    
    
    11,865Inventories
    
    
    (317
    )
    
    
    385
    
    
    
    172
    
    
    
    246Other current assets
    
    
    (47
    )
    
    
    1
    
    
    
    (26
    )
    
    
    (741
    )Accounts payable and accrued expenses
    
    
    277
    
    
    
    136
    
    
    
    535
    
    
    
    (4,466
    )Accrued income taxes
    
    
    117
    
    
    
    (817
    )
    
    
    673
    
    
    
    76Deferred revenue
    
    
    (122
    )
    
    
    (183
    )
    
    
    (292
    )
    
    
    (1,965
    )Other assets and liabilities
    
    
    12
    
    
    
    1
    
    
    
    157
    
    
    
    (1,041
    )Net cash provided by continuing operations
    
    
    8,960
    
    
    
    8,289
    
    
    
    8,659
    
    
    
    3,028Net cash provided by discontinued operations
    
    
    1,423
    
    
    
    1,913
    
    
    
    770
    
    
    
    491Net cash provided by operating activities
    
    
    10,383
    
    
    
    10,202
    
    
    
    9,429
    
    
    
    3,519Investing activities:Purchases of property and equipment
    
    
    (1,809
    )
    
    
    (3,381
    )
    
    
    (2,166
    )
    
    
    (484
    )Proceeds from asset sales
    
    
    6
    
    
    
    55
    
    
    
    1,459Acquisition of business, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (73,928
    )
    
    
    (585
    )Other
    
    
    (25
    )
    
    
    5Net cash used in investing activities
    
    
    (1,828
    )
    
    
    (3,321
    )
    
    
    (74,635
    )
    
    
    (1,069
    )Financing activities:Proceeds from borrowings on revolving line of credit
    
    
    
    
    
    
    
    
    
    
    1,939
    
    
    
    8,500Proceeds from borrowings on long-term debt
    
    
    
    
    
    
    
    
    
    
    120,000Distributions paid to Gray Television, Inc.
    
    
    
    
    
    
    
    
    
    
    (43,953
    )
    
    
    (647
    )Other transfers to Gray Television, Inc., net
    
    
    (8,050
    )
    
    
    (6,709
    )
    
    
    (8,103
    )Repayments of borrowings on debt
    
    
    (68
    )
    
    
    (56
    )
    
    
    
    
    
    
    (11,163
    )Debt issue costs
    
    
    
    
    
    
    
    
    
    
    (3,888
    )
    
    
    (400
    )Net cash provided by (used in) financing activities
    
    
    (8,118
    )
    
    
    (6,765
    )
    
    
    65,995
    
    
    
    (3,710
    )Increase (decrease) in cash and cash equivalents
    
    
    437
    
    
    
    116
    
    
    
    789
    
    
    
    (1,260
    )Cash and cash equivalents, beginning of period
    
    
    91
    
    
    
    528
    
    
    
    644
    
    
    
    1,433Cash and cash equivalents, end of period
    
    $
    528
    
    
    $
    644
    
    
    $
    1,433
    
    
    $
    173
 
 53




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##### Table of Contents



TRIPLE CROWN MEDIA, INC.
NOTES TO COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS
 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation 
  54




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##### Table of Contents



Use of Estimates 
 Change in Fiscal Year
 Revenue Recognition and Rights Fee Expenses 
  55




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##### Table of Contents



Barter Transactions
 56




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##### Table of Contents



Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Trade barter revenue
    
    $
    427
    
    
    $
    455
    
    
    $
    600
    
    
    $
    461Trade barter expense
    
    
    (540
    )
    
    
    (508
    )
    
    
    (665
    )
    
    
    (662
    )$
    (113
    )
    
    $
    (53
    )
    
    $
    (65
    )
    
    $
    (201
    )
 Advertising Expense 
 Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Newspaper publishing
    
    $
    71
    
    
    $
    116
    
    
    $
    91
    
    
    $
    57Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    252Association management
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28Wireless
    
    
    188
    
    
    
    118
    
    
    
    126
    
    
    
    107$
    259
    
    
    $
    234
    
    
    $
    217
    
    
    $
    444
 Cash and Cash Equivalents
 Accounts Receivable and Credit Risk
   57




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##### Table of Contents



Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Balance at beginning of period
    
    $
    178
    
    
    $
    135
    
    
    $
    195
    
    
    $
    492Addition of acquired business
    
    
    
    
    
    
    
    
    
    
    341
    
    
    
    (5
    )Provision for bad debts
    
    
    139
    
    
    
    288
    
    
    
    159
    
    
    
    156Write-offs
    
    
    (182
    )
    
    
    (228
    )
    
    
    (203
    )
    
    
    (208
    )Balance at end of period
    
    $
    135
    
    
    $
    195
    
    
    $
    492
    
    
    $
    435
 Inventories 
 December 31,
    
    
    June 30,2005
    
    
    2006Publishing inventories
    
    $
    438
    
    
    $
    647Collegiate marketing and production
services inventories
    
    
    801
    
    
    
    542Wireless inventories
    
    
    429
    
    
    
    309$
    1,668
    
    
    $
    1,498
 Property and Equipment
 Income Taxes 
 Stock-Based Compensation 
 58




---



##### Table of Contents



Year Ended December 31,2003
    
    
    2004
    
    
    2005Net income available to common
stockholders, as reported
    
    $
    6,929
    
    
    $
    7,255
    
    
    $
    4,414Add: Stock-based employee
compensation expense included in
reported net income, net of related
tax effects
    
    
    0
    
    
    
    0
    
    
    
    0Deduct: Total stock-based employee
compensation expense determined
under fair value based method for all
awards, net of related tax effects
    
    
    (155
    )
    
    
    (70
    )
    
    
    (31
    )Net income available to common
stockholders, pro forma
    
    $
    6,774
    
    
    $
    7,185
    
    
    $
    4,383Net income available to common
stockholders per share:Basic and diluted, as reported
    
    $
    1.42
    
    
    $
    1.49
    
    
    $
    0.91Basic and diluted, pro forma
    
    $
    1.39
    
    
    $
    1.48
    
    
    $
    0.90
   Valuation and Impairment Testing of Intangible Assets 
  59




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##### Table of Contents



Accounting for Derivatives 
 60




---



##### Table of Contents



Gray Television, Inc. Net Investment 
 Comprehensive Income (Loss) 
 Earnings (Loss) Per Share 
  Reclassifications
 Recent Accounting Pronouncements
 Accounting Changes and Corrections of Errors
 61




---



##### Table of Contents



Share Based Payments 
 Accounting for Uncertainty in Income Taxes 
 3. ACQUISITION OF BULL RUN CORPORATION
   Bull Run debt repaid at closing
    
    $
    72,124Common and preferred stock issued
    
    
    24,313Redemption of Bull Run preferred stock
    
    
    2,825Assumption of Bull Run operating liabilities
    
    
    2,484Cash acquired at closing
    
    
    (1,022
    )$
    100,724
   62




---



##### Table of Contents



Receivables
    
    $
    16,877Other current assets
    
    
    1,791Property and equipment
    
    
    4,044Goodwill
    
    
    69,075Customer base and trademarks
    
    
    17,700Other noncurrent assets
    
    
    2,757Deferred income taxes
    
    
    16,018Accounts payable and accrued expenses
    
    
    (20,218
    )Deferred revenue
    
    
    (5,196
    )Other noncurrent liabilities
    
    
    (2,124
    )$
    100,724
  (Unaudited)Year Ended December 31,2004
    
    
    2005Operating revenues
    
    $
    112,668
    
    
    $
    119,502Operating income (loss)
    
    $
    11,575
    
    
    $
    6,817Loss from continuing operations
    
    $
    (583
    )
    
    $
    (3,438
    )Net loss
    
    $
    (5,771
    )
    
    $
    (3,402
    )Net loss available to common stockholders
    
    $
    (6,855
    )
    
    $
    (4,486
    )Per share, basic and diluted:Net loss available to common stockholders
    
    $
    (1.34
    )
    
    $
    (0.87
    )Pro forma weighted average shares outstanding
    
    
    5,129,000
    
    
    
    5,129,000
  4. ACQUISITION OF JONESBORO GROUP
   63




---



##### Table of Contents



Receivables
    
    $
    716Other current assets
    
    
    115Property and equipment
    
    
    1,410Goodwill
    
    
    13,618Customer base and trademarks
    
    
    7,830Deferred income taxes
    
    
    (1,873
    )Accounts payable and accrued expenses
    
    
    (165
    )Deferred Revenue
    
    
    (151
    )$
    21,500
   (Unaudited)Year Ended
    
    
    Six MonthsDecember 31,
    
    
    Ended June 30,2005
    
    
    2006Operating revenues
    
    $
    120,427
    
    
    $
    56,158Operating income (loss)
    
    
    6,991
    
    
    
    5,863Income (loss) from continuing operations
    
    
    (3,356
    )
    
    
    (917
    )Gain on disposal of discontinued operation
    
    
    
    
    
    
    5,685Net income (loss)
    
    
    (3,320
    )
    
    
    4,893Net income (loss) available to common
    
    
    (4,404
    )
    
    
    4,351stockholdersPer share, basic and diluted:Net loss available to common stockholders
    
    $
    (0.86
    )
    
    $
    0.85Pro forma weighted average shares outstanding
    
    
    5,129
    
    
    
    5,139
  5. CORPORATE AND ADMINISTRATIVE EXPENSE
 64




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##### Table of Contents



6. TRANSACTIONS WITH AFFILIATED COMPANIES
 Insurance Contract with Georgia Casualty & Surety Co. 
 Rights-Sharing Agreement with Gray 
 7. GOODWILL AND INTANGIBLE ASSETS
  65




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##### Table of Contents



Net Amount at
    
    
    
    
    
    
    Net Amount atDecember 31,
    
    
    
    
    
    
    December 31,2003
    
    
    Amortization
    
    
    2004Goodwill:Publishing
    
    $
    4,782
    
    
    
    
    
    
    $
    4,782FCC licenses:Wireless
    
    $
    4,829
    
    
    
    
    
    
    $
    4,829Definite lived intangible assets:Wireless
    
    
    5
    
    
    
    (5
    )
    
    
    0$
    5
    
    
    $
    (5
    )
    
    $
    0Total intangible assets net of
accumulated amortization
    
    $
    9,616
    
    
    $
    (5
    )
    
    $
    9,611
 Net Amount at
    
    
    Acquisitions
    
    
    
    
    
    
    
    
    
    
    Net Amount atDecember 31,
    
    
    and
    
    
    
    
    
    
    
    
    
    
    December 31,2004
    
    
    Dispositions
    
    
    Impairment
    
    
    Amortization
    
    
    2005Goodwill:Publishing
    
    $
    4,782
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,782Collegiate Marketing and
Production Services
    
    
    
    
    
    
    53,935
    
    
    
    
    
    
    
    
    
    
    
    53,935Association Management
    
    
    
    
    
    
    15,013
    
    
    
    
    
    
    
    
    
    
    
    15,013$
    4,782
    
    
    $
    68,948
    
    
    
    
    
    
    
    
    
    
    $
    73,730FCC licenses:Wireless
    
    $
    4,829
    
    
    $
    (823
    )
    
    $
    (3,206
    )
    
    
    
    
    
    $
    800Definite lived intangible
assets:PublishingCollegiate Marketing and
Production Services
    
    
    
    
    
    $
    12,170
    
    
    
    
    
    
    $
    (4
    )
    
    $
    12,166Association Management
    
    
    
    
    
    
    5,530
    
    
    
    
    
    
    
    (3
    )
    
    
    5,527$
    17,700
    
    
    
    
    
    
    $
    (7
    )
    
    $
    17,693Total intangible assets net of
accumulated amortization
    
    $
    9,611
    
    
    $
    85,825
    
    
    $
    (3,206
    )
    
    $
    (7
    )
    
    $
    92,223
 66




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##### Table of Contents



Net Amount at
    
    
    Acquisitions
    
    
    
    
    
    
    Net Amount atDecember 31,
    
    
    and
    
    
    
    
    
    
    June 30,2005
    
    
    Dispositions
    
    
    Amortization
    
    
    2006Goodwill:Publishing
    
    $
    4,782
    
    
    $
    13,618
    
    
    
    
    
    
    $
    18,400Collegiate Marketing and
Production Services
    
    
    53,935
    
    
    
    (16
    )
    
    
    
    
    
    
    53,919Association Management
    
    
    15,013
    
    
    
    143
    
    
    
    
    
    
    
    15,156$
    73,730
    
    
    $
    13,745
    
    
    
    
    
    
    $
    87,475FCC licenses:Wireless
    
    $
    800
    
    
    
    
    
    
    
    
    
    
    $
    800Definite lived intangible
assets:Publishing
    
    
    
    
    
    $
    7,830
    
    
    $
    (165
    )
    
    $
    7,665Collegiate Marketing and
Production Services
    
    $
    12,166
    
    
    
    
    
    
    $
    (679
    )
    
    $
    11,487Association Management
    
    
    5,527
    
    
    
    
    
    
    
    (562
    )
    
    
    4,965$
    17,693
    
    
    $
    7,830
    
    
    $
    (1,406
    )
    
    $
    24,117Total intangible assets net of
accumulated amortization
    
    $
    92,223
    
    
    $
    21,575
    
    
    $
    (1,406
    )
    
    $
    112,392
   As of December 31, 2005
    
    
    As of June 30, 2006Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedGross
    
    
    Amortization
    
    
    Net
    
    
    Gross
    
    
    Amortization
    
    
    NetIntangible asset not
subject to amortization:FCC licenses
    
    $
    6,503
    
    
    $
    (5,703
    )
    
    $
    800
    
    
    $
    6,503
    
    
    $
    (5,703
    )
    
    $
    800Goodwill
    
    
    75,729
    
    
    
    (1,999
    )
    
    
    73,730
    
    
    
    89,474
    
    
    
    (1,999
    )
    
    
    87,475$
    82,232
    
    
    $
    (7,702
    )
    
    $
    74,530
    
    
    $
    95,977
    
    
    $
    (7,702
    )
    
    $
    88,275Other definite lived
intangible assets subject
to amortization
    
    $
    17,700
    
    
    $
    (7
    )
    
    $
    17,693
    
    
    $
    25,523
    
    
    $
    (1,406
    )
    
    $
    24,117Total intangibles
    
    $
    99,932
    
    
    $
    (7,709
    )
    
    $
    92,223
    
    
    $
    121,500
    
    
    $
    (9,108
    )
    
    $
    112,392
  8. ACCRUED EXPENSES
  67




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December 31,
    
    
    June 30,2005
    
    
    2006Compensation and related costs
    
    $
    2,138
    
    
    $
    1,993Guaranteed rights fees and profit splits
    
    
    8,203
    
    
    
    3,958Accrued Interest
    
    
    36
    
    
    
    1,703Other accrued liabilities
    
    
    4,828
    
    
    
    3,796$
    15,205
    
    
    $
    11,450
 9. LONG-TERM DEBT
  December 31,
    
    
    June 30,2005
    
    
    2006First lien senior term loan
    
    $
    90,000
    
    
    $
    89,276Second lien senior term loan
    
    
    30,000
    
    
    
    30,000First lien revolving credit facility
    
    
    1,939
    
    
    
    $
    121,939
    
    
    $
    119,276
  Year
    
    Total2007
    
    $
    9002008
    
    
    9002009
    
    
    9002010
    
    
    116,576$
    119,276
   68




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10. INCOME TAXES
 69




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##### Table of Contents



For the SixYear Ended December 31,
    
    
    Months Ended2003
    
    
    2004
    
    
    2005
    
    
    June 30, 2006Current:Federal
    
    $
    2,724
    
    
    $
    2,686
    
    
    $
    2,432
    
    
    $
    5,621State and local
    
    
    511
    
    
    
    504
    
    
    
    313
    
    
    
    450Deferred
    
    
    973
    
    
    
    1,121
    
    
    
    (22
    )
    
    
    (2,998
    )$
    4,208
    
    
    $
    4,311
    
    
    $
    2,723
    
    
    $
    3,073
  For the SixYear Ended December 31,
    
    
    Months Ended2003
    
    
    2004
    
    
    2005
    
    
    June 30, 2006Continuing operations
    
    $
    3,698
    
    
    $
    3,638
    
    
    $
    2,098
    
    
    $
    (578
    )Income from discontinued operations
    
    
    510
    
    
    
    673
    
    
    
    625
    
    
    
    174Gain on disposal of discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,477$
    4,208
    
    
    $
    4,311
    
    
    $
    2,723
    
    
    $
    3,073
   70




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December 31,
    
    
    June 30,2005
    
    
    2006Deferred tax assets:Allowance for doubtful accounts
    
    $
    193
    
    
    $
    159Reserves against nonoperating receivables
    
    
    2,409
    
    
    
    2,175Accrued expenses
    
    
    1,054
    
    
    
    884Net operating loss carryforward
    
    
    28,622
    
    
    
    26,848Contribution carryforward
    
    
    
    
    
    
    92Business credit carryforward
    
    
    116
    
    
    
    116Stock options
    
    
    
    
    
    
    32Alternative Minimum Tax credit carryforward
    
    
    490
    
    
    
    566Total deferred tax assets
    
    
    32,884
    
    
    
    30,872Deferred tax liabilities:Net book value of property and equipment
    
    
    (1,413
    )
    
    
    (1,486
    )FCC licenses, goodwill and other intangibles
    
    
    (2,535
    )
    
    
    (3,442
    )Other
    
    
    (260
    )
    
    
    (266
    )Total deferred tax liabilities
    
    
    (4,208
    )
    
    
    (5,194
    )Net deferred tax assets (liabilities) before valuation allowance
    
    
    28,676
    
    
    
    25,678Valuation allowance
    
    
    (9,485
    )
    
    
    (9,485
    )Deferred tax assets (liabilities), net
    
    $
    19,191
    
    
    $
    16,193
   For the SixYear Ended December 31,
    
    
    Months Ended2003
    
    
    2004
    
    
    2005
    
    
    June 30, 2006Statutory federal rate applied to income before
income taxes
    
    $
    3,787
    
    
    $
    3,933
    
    
    $
    2,428
    
    
    $
    2,542State and local taxes, net of federal tax benefit
    
    
    337
    
    
    
    333
    
    
    
    257
    
    
    
    296Interest on series B preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77Other items, net
    
    
    84
    
    
    
    45
    
    
    
    38
    
    
    
    158Income tax expense
    
    $
    4,208
    
    
    $
    4,311
    
    
    $
    2,723
    
    
    $
    3,073
 11. DISCONTINUED OPERATIONS
  71




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For the SixFor the Year Ended December 31,
    
    
    Months Ended2003
    
    
    2004
    
    
    2005
    
    
    June 30, 2006Operating revenue
    
    $
    5,749
    
    
    $
    5,964
    
    
    $
    5,966
    
    
    $
    1,417Income before taxes
    
    
    1,246
    
    
    
    1,771
    
    
    
    1,613
    
    
    
    445Income tax expense
    
    
    510
    
    
    
    673
    
    
    
    625
    
    
    
    174Income, net of tax
    
    
    736
    
    
    
    1,098
    
    
    
    988
    
    
    
    271Gain on exchange, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,685
  December 31,2005Current assets
    
    $
    622Property and equipment
    
    
    1,322Goodwill
    
    
    11,997Current liabilities
    
    
    685
  12. PREFERRED STOCK
  72




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13. STOCK OPTIONS AND OTHER EQUITY COMPENSATION PLANS
   73




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##### Table of Contents



Weighted-average expected volatility
    
    
    33.6
    %Expected life (years)
    
    
    5.75Expected dividend yield
    
    
    0.00
    %Risk-free interest rate
    
    
    4.97
    %
  (in
thousands, except per share data and number of years)
 Weighted-AverageWeighted-
    
    
    RemainingNumber
    
    
    Average
    
    
    Contractual
    
    
    Aggregateof
    
    
    Exercise
    
    
    Term
    
    
    IntrinsicShares
    
    
    Price
    
    
    (in years)
    
    
    ValueOutstanding at
December 31, 2005
    
    
    7
    
    
    $
    501.92Granted
    
    
    374
    
    
    $
    5.43
    
    
    
    9.8
    
    
    $
    1,212Forfeited or expired
    
    
    (1
    )
    
    $
    546.56Outstanding at
June 30, 2006
    
    
    380
    
    
    $
    12.70
    
    
    
    9.7
    
    
    $
    1,212Exercisable at
June 30, 2006
    
    
    6
    
    
    $
    489.14
    
    
    
    3.5
 74




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##### Table of Contents



14. EMPLOYEE BENEFIT PLANS
     75




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##### Table of Contents



15. COMMITMENTS AND CONTINGENCIES
 Operating Leases
 Legal Matters
    76




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##### Table of Contents



Indemnification
 16. INFORMATION ON BUSINESS SEGMENTS
   77




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##### Table of Contents



Six MonthsYear Ended December 31,
    
    
    Ended June 30,2003
    
    
    2004
    
    
    2005
    
    
    2006Operating revenues:Publishing
    
    $
    36,670
    
    
    $
    38,790
    
    
    $
    40,237
    
    
    $
    22,047Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    97
    
    
    
    24,174Association management
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    4,701Wireless
    
    
    8,883
    
    
    
    8,129
    
    
    
    7,507
    
    
    
    3,457Total operating revenue
    
    $
    45,553
    
    
    $
    46,919
    
    
    $
    47,857
    
    
    $
    54,379Operating income:Publishing
    
    $
    8,927
    
    
    $
    9,217
    
    
    $
    7,992
    
    
    $
    5,493Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    826Association management
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    608Wireless
    
    
    941
    
    
    
    544
    
    
    
    (2,210
    )
    
    
    280Corporate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,594
    )Total operating income
    
    
    9,868
    
    
    
    9,761
    
    
    
    5,767
    
    
    
    4,613Discontinued operationsMiscellaneous income, net
    
    
    53
    
    
    
    37Amortization of Debt Issue Costs
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (608
    )Interest expense
    
    
    (30
    )
    
    
    (3
    )
    
    
    (237
    )
    
    
    (6,143
    )Income (loss) from continuing operations
before income taxes
    
    $
    9,891
    
    
    $
    9,795
    
    
    $
    5,527
    
    
    $
    (2,138
    )Depreciation and amortization expense:Publishing
    
    $
    1,019
    
    
    $
    1,322
    
    
    $
    987
    
    
    $
    725Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    977Association management
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    620Wireless
    
    
    1,054
    
    
    
    858
    
    
    
    3,656
    
    
    
    212Corporate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    610Total depreciation and amortization expense
    
    $
    2,073
    
    
    $
    2,180
    
    
    $
    4,652
    
    
    $
    3,144Loss (gain) on disposal of assets, net:Publishing (1)
    
    $
    161
    
    
    $
    49
    
    
    $
    47
    
    
    $
    (5,685
    )Wireless
    
    
    225
    
    
    
    360
    
    
    
    (479
    )
    
    
    Total loss (gain) on disposal of assets, net
    
    $
    386
    
    
    $
    409
    
    
    $
    (432
    )
    
    $
    (5,685
    )Capital expenditures:Publishing
    
    $
    491
    
    
    $
    1,343
    
    
    $
    2,096
    
    
    $
    195Collegiate marketing and production services
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    117Association management
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    154Wireless
    
    
    822
    
    
    
    466
    
    
    
    70
    
    
    
    Corporate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18Total capital expenditures
    
    $
    1,313
    
    
    $
    1,809
    
    
    $
    2,166
    
    
    $
    484
 
 (1)
    
    Includes gain on disposition of The Goshen News accounted for in
discontinued operations. As of
    
    
    As ofDecember 31,
    
    
    June 30,2005
    
    
    2006Identifiable assets:Publishing
    
    $
    19,721
    
    
    $
    36,272Collegiate marketing and production services
    
    
    90,731
    
    
    
    79,813Association management
    
    
    21,577
    
    
    
    21,332Wireless
    
    
    4,830
    
    
    
    4,507136,859
    
    
    
    141,924Corporate
    
    
    20,229
    
    
    
    21,651Discontinued operations
    
    
    13,941Total identifiable assets
    
    $
    171,029
    
    
    $
    163,575
  78




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##### Table of Contents



17. SUPPLEMENTAL CASH FLOW INFORMATION
  18. CHANGE IN FISCAL YEAR END
  79




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##### Table of Contents



For the SixMonths EndedJune 30,2005(Unaudited)Operating RevenuesPublishing
    
    $
    19,779Collegiate Marketing & Production Services
    
    $
    22,336Association Management
    
    $
    4,293Wireless
    
    $
    4,130Total Revenue
    
    $
    50,538ExpensesOperating expenses before depreciation, amortization
and loss on disposal of assets, net:Publishing
    
    $
    14,713Collegiate Marketing & Production Services
    
    $
    22,089Association Management
    
    $
    3,045Wireless
    
    $
    2,962Corporate and Administrative
    
    $
    586Depreciation
    
    $
    1,019Amortization and impairment of intangible assetsLoss (gain) on disposal of assets, net
    
    $
    (44
    )Total Expenses
    
    $
    44,370Operating Income (Loss)
    
    $
    6,168Total Interest Expense, Net
    
    $
    (818
    )Income (Loss) from Continuing Operations
    
    $
    5,350Income Tax Expense
    
    $
    1,581Earnings from Continuing Operations
    
    $
    3,769Income From Discontinued Operations, net of Tax
    
    $
    543Pro-Forma Net Income
    
    $
    4,312
 80




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##### Table of Contents



19. SELECTED QUARTERLY FINANCIAL DATA (unaudited)
  Quarter Ended (a)September 30,
    
    December 31,
    
    March 31,
    
    June 30,2005
    
    2005
    
    2006
    
    2006Operating revenues
    
    $
    11,646
    
    
    $
    12,301
    
    
    $
    32,648
    
    
    $
    21,731Operating income (loss)
    
    
    2,321
    
    
    
    (1,373
    )
    
    
    4,123
    
    
    
    490Earnings (loss) from continuing operations
    
    
    1,436
    
    
    
    (997
    )
    
    
    464
    
    
    
    (2,024
    )Income from discontinued operations, net of tax
    
    
    242
    
    
    
    203
    
    
    
    271Gain on exchange of discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,685Net income (loss)
    
    
    1,679
    
    
    
    (799
    )
    
    
    735
    
    
    
    3,661Net income (loss) available to common stockholders
    
    
    1,679
    
    
    
    (802
    )
    
    
    464
    
    
    
    3,390Per share data, basic and dilutedEarnings (loss) from continuing operations
    
    $
    0.34
    
    
    $
    (0.16
    )
    
    $
    0.09
    
    
    $
    (0.39
    )Income from discontinued operations
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    0.05
    
    
    $
    Gain on disposal of discontinued operations, net of tax
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1.10Net income
    
    $
    0.34
    
    
    $
    (0.16
    )
    
    $
    0.14
    
    
    $
    0.71Net income available to common stockholders
    
    $
    0.34
    
    
    $
    (0.16
    )
    
    $
    0.09
    
    
    $
    0.66Weighted average number of shares, basic and diluted
    
    
    4,870
    
    
    
    4,873
    
    
    
    5,131
    
    
    
    5,147
 Quarter EndedSeptember 30,
    
    December 31,
    
    March 31,
    
    June 30,2004
    
    2004
    
    2005
    
    2005Operating revenues
    
    $
    11,661
    
    
    $
    12,584
    
    
    $
    11,743
    
    
    $
    12,167Operating income (loss)
    
    
    2,296
    
    
    
    2,654
    
    
    
    2,118
    
    
    
    2,701Earnings (loss) from continuing operations
    
    
    1,421
    
    
    
    1,752
    
    
    
    1,315
    
    
    
    1,675Income from discontinued operations, net of tax
    
    
    294
    
    
    
    260
    
    
    
    272
    
    
    
    271Net income (loss)
    
    
    1,715
    
    
    
    2,012
    
    
    
    1,557
    
    
    
    1,980Net income (loss) available to common stockholders
    
    
    1,715
    
    
    
    2,012
    
    
    
    1,557
    
    
    
    1,980Per share data, basic and dilutedEarnings (loss) from continuing operations
    
    $
    0.35
    
    
    $
    0.41
    
    
    $
    0.32
    
    
    $
    0.41Income from discontinued operations
    
    $
    0.06
    
    
    $
    0.05
    
    
    $
    0.06
    
    
    $
    0.06Net income
    
    $
    0.35
    
    
    $
    0.41
    
    
    $
    0.32
    
    
    $
    0.41Net income available to common stockholders
    
    $
    0.35
    
    
    $
    0.41
    
    
    $
    0.32
    
    
    $
    0.41Weighted average number of shares, basic and diluted
    
    
    4,870
    
    
    
    4,870
    
    
    
    4,870
    
    
    
    4,870
 Quarter EndedMarch 31,
    
    June 30,2004
    
    2004Operating revenues
    
    $
    11,192
    
    
    $
    11,482Operating income (loss)
    
    
    2,383
    
    
    
    2,428Earnings (loss) from continuing operations
    
    
    1,471
    
    
    
    1,513Income from discontinued operations, net of tax
    
    
    189
    
    
    
    355Net income (loss)
    
    
    1,660
    
    
    
    1,868Net income (loss) available to common stockholders
    
    
    1,660
    
    
    
    1,868Per share data, basic and dilutedEarnings (loss) from continuing operations
    
    $
    0.34
    
    
    $
    0.38Income from discontinued operations
    
    $
    0.04
    
    
    $
    0.07Net income
    
    $
    0.34
    
    
    $
    0.38Net income available to common stockholders
    
    $
    0.34
    
    
    $
    0.38Weighted average number of shares, basic and diluted
    
    
    4,870
    
    
    
    4,870
 (a)
    
    Until December 30, 2005, our operations were comprised of the Newspaper Publishing
and GrayLink Wireless businesses. Following the consummation of the Merger on
December 30, 2005, our Company is now comprised of the Newspaper Publishing and
GrayLink Wireless segments plus Bull Runs Collegiate Marketing and Production
Services business segment and Association Management Services business segment. The
operating results prior to the quarter ended March 31, 2006 include only one day of
operating results for the Collegiate Marketing and Production Services and Association
Management operations in the quarter ended December 31, 2005. Beginning with the
quarter ended March 31, 2006, the operating results of our Collegiate Marketing and
Production Services or Association Management business segments are fully reflected in
our financial statements. Our Collegiate Marketing and Production Services business
is seasonal in nature. We derive a significant portion of our income from collegiate
football and collegiate basketball. Typically, our quarters ended December 31 and
March 31 correspond with the collegiate football and collegiate basketball seasons and
are our highest revenue quarters, the quarter ended September 30 is weaker and the
quarter ended June 30 shows the least revenue. Our operating results trend with this
seasonality. Our Newspaper Publishing, Association
 81




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##### Table of Contents



Management and Wireless segments
are generally consistent throughout the year and do not fluctuate significantly from
quarter to quarter.
 20. SUBSEQUENT EVENTS
   82




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##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
  
 Item 9A. Controls and Procedures
 Disclosure Controls and Procedures
    
 Item 9B. Other Information
  83




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##### Table of Contents



PART III
 
 Item 10. Directors and Executive Officers of the Registrant
  Name
    
    Age
    
    PositionRobert S. Prather, Jr.
    
    
    61
    
    
    Director, ChairmanThomas J. Stultz
    
    
    54
    
    
    Director, President and Chief Executive OfficerGerald N. Agranoff
    
    
    59
    
    
    DirectorJames W. Busby
    
    
    52
    
    
    DirectorMichael Steven Cornwell
    
    
    41
    
    
    Executive Vice President of OperationsHilton H. Howell, Jr.
    
    
    44
    
    
    DirectorMonte
C. Johnson
    
    
    69
    
    
    DirectorGeorge E. Nick Nicholson
    
    
    58
    
    
    DirectorMark G. Meikle
    
    
    41
    
    
    Executive Vice President and Chief Financial Officer
       84




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##### Table of Contents



Audit Committee
  Section 16(a) Beneficial Ownership Reporting Compliance
   Code of Ethics
 www.triplecrownmedia.com
 85




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##### Table of Contents



Item 11. Executive Compensation
  Summary Compensation Table (1)
 Long TermCompensation AwardsRestricted
    
    
    
    
    
    SecuritiesAnnual Compensation
    
    
    
    
    
    Stock
    
    
    
    
    
    Underlying
    
    
    
    
    
    All OtherName and Position
    
    Year
    
    Salary ($)
    
    
    
    
    
    Bonus ($)
    
    
    
    
    
    Awards (2)
    
    
    
    
    
    Options (#)
    
    
    
    
    
    Compensation ($)Robert S. Prather, Jr. (3)
    
    
    2006
    
    
    
    30,769
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    (4
    )
    
    
    100,000
    
    
    
    (4
    )
    
    
    42,394
    
    
    
    (9
    )Chairman
    
    
    2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,200
    
    
    
    (9
    )2004
    
    
    
    738,143
    
    
    
    (5
    )
    
    
    650,000
    
    
    
    (6
    )
    
    
    13,530
    
    
    
    (7
    )
    
    
    50,000
    
    
    
    (8
    )
    
    
    83,945
    
    
    
    (9
    )2003
    
    
    
    651,528
    
    
    
    (5
    )
    
    
    275,000
    
    
    
    (6
    )
    
    
    1,420,750
    
    
    
    (7
    )
    
    
    41,000
    
    
    
    (8
    )
    
    
    41,346
    
    
    
    (9
    )Thomas J. Stultz (10)
    
    
    2006
    
    
    
    265,385
    
    
    
    (11
    )
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    (14)
    
    
    
    100,000
    
    
    
    (14
    )
    
    
    30,752
    
    
    
    (15
    )President and Chief
    
    
    2005
    
    
    
    441,667
    
    
    
    (12
    )
    
    
    159,813
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,198
    
    
    
    (15
    )Executive Officer
    
    
    2004
    
    
    
    313,389
    
    
    
    (13
    )
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,397
    
    
    
    (15
    )2003
    
    
    
    265,000
    
    
    
    
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,116
    
    
    
    (15
    )Mark G. Meikle (16)
    
    
    2006
    
    
    
    36,346
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    (17
    )
    
    
    68,141
    
    
    
    (18
    )Executive VicePresident and ChiefFinancial OfficerMichael Steven Cornwell (19)
    
    
    2006
    
    
    
    36,058
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000
    
    
    
    (20
    )
    
    
    99,495
    
    
    
    (21
    )Executive VicePresident ofOperationsLawton M. Logan (22)
    
    
    2006
    
    
    
    129,330
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    (24
    )
    
    
    4,496
    
    
    
    (25
    )Senior Vice President
    
    
    2005
    
    
    
    257,258
    
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    of Sales
    
    
    2004
    
    
    
    57,593
    
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Frederick J. Erickson (26)
    
    
    2006
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,461
    
    
    
    (27
    )Former Chief Financial
    
    
    2005
    
    
    
    210,000
    
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )Officer
    
    
    2004
    
    
    
    179,808
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,570
    
    
    
    (27
    )2003
    
    
    
    166,807
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,004
    
    
    
    (27
    )
 (1)
    
    Until December 30, 2005, TCM, was comprised of integrated businesses owned and
operated by Gray. On December 30, 2005, all shares of the Common Stock were distributed to
shareholders of Gray, and as a result, TCM became a separate, stand-alone entity, independent
of Gray, in a series of transactions referred to as the Spin-off. Immediately following the
Spin-off, and also on December 30, 2005, Bull Run, was merged into a wholly-owned subsidiary
of TCM, which is referred to as the Merger. In April 2006, we elected to change our fiscal
year end from December 31 to a new fiscal year end of June 30. As a result of the change, the
compensation related information related to 2006 reflects compensation earned during the six
months ended June 30, 2006.(2)
    
    As of June 30, 2006, we had 35,000 shares of the Common Stock outstanding, which had
an aggregate value as of June 30, 2006 of $303,450 based upon the June 30, 2006 share price of
$8.67. On February 15, 2006, under the Incentive Plan, we granted 5,000 shares of restricted
Common Stock to each of the following directors of the Company: Robert S. Prather, Jr.; Thomas
J. Stultz; Gerald N. Agranoff; James W. Busby; Hilton H. Howell, Jr.; Monte C. Johnson; and
George E. Nick Nicholson. The shares of restricted stock will vest
in five equal annual installments, with the first tranche vesting on December 31, 2006. Prior
to the applicable vesting dates, the shares of restricted stock are subject to the risk of
forfeiture and may not be sold or transferred. While the shares of stock are subject to
forfeiture, the holder may exercise full voting rights and will receive dividends and other
distributions paid with respect to the shares of restricted stock.(3)
    
    During 2005, 2004, and 2003, Mr. Prather was employed by Gray Television, Inc.
(Gray) and Bull Run Corporation (Bull Run). Mr. Prather is currently Chairman of the
board of directors. As of June 30, 2006, TCM paid Mr. Prathers salary at the annual rate of
$100,000.(4)
    
    The restricted stock awards and stock options were granted to Mr. Prather in 2006 by
TCM.
 86




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##### Table of Contents



(5)
    
    During 2005, Gray paid Mr. Prathers salary at the annual rate of $750,000. In 2004,
$88,143 and $650,000 of Mr. Prathers salary was paid by Bull Run and Gray, respectively. In
2003, $201,528 and $450,000 of Mr. Prathers salary was paid by Bull Run and Gray,
Respectively.(6)
    
    Mr. Prathers bonuses in 2004 and 2003 were paid by Gray.(7)
    
    The restricted stock awards to Mr. Prather in 2004 and 2003 were granted by Gray.(8)
    
    The stock options in 2004 and 2003 were granted to Mr. Prather by Gray.(9)
    
    For the six months ended June 30, 2006, the amount reported includes an auto
allowance of $12,800, TCM directors fees of $14,500, term life insurance of $14,265, and
long-term disability insurance premium payments of $829. For 2005, the amount reported
includes an auto allowance paid by Bull Run of $19,200 and Bull Run directors fees of
$15,000. For 2004, the amount reported includes term life insurance of $8,849 (Gray), long
term disability insurance premium payments of $2,249 (Gray), matching contributions by Grays
401(k) plan of $6,000, directors fees of $17,700 (Gray), directors fees of $15,000 (Bull
Run), employer contributions to defined contribution retirement plan of $1,247 (Bull Run) and
an auto allowance (Bull Run) of $18,400. For 2003, amount includes term life insurance of
$3,096 (Gray), long-term disability insurance premiums of $2,249 (Gray), matching contribution
by Grays 401(k) of $4,455, directors fees of $25,500 (Gray) and employer contributions to
(Gray) defined contribution retirement plan of $6,046.(10)
    
    During 2003 and until August 2004, Mr. Stultzs was employed by Gray. From August
2004 until December 30, 2005, Mr. Stultz was employed by Bull Run. Since December 30, 2005,
Mr. Stultz has been employed by TCM.(11)
    
    As of June 30, 2006, TCM paid Mr. Stultz at the annual rate of $550,000.(12)
    
    During 2005, Mr. Stultz received $116,667 from Gray as a consulting fee and a salary
of $325,000 from Bull Run.(13)
    
    During 2003, $300,000 and $13,389 of Mr. Stultzs salary was paid by Gray and Bull
Run, respectively.(14)
    
    The restricted stock awards and stock options were granted to Mr. Stultz in 2006 by
TCM.(15)
    
    For the six months ended June 30, 2006, the amount reported includes $4,500 for auto
allowance, $4,367 as the fair value of travel expenses for Mr. Stultzs spouse, $14,500 of
directors fees and matching contributions by TCM to its 401(k) program of $7,385. For 2005,
the amount reported includes $31,186 for relocation expenses and $7,012 as the fair value of
travel expenses for Mr. Stultzs spouse. For 2004, the amount reported includes matching
contributions by Gray to its 401(k) plan of $4,500, term life insurance premiums of $1,822
(Gray). For 2003, the amount includes matching contributions by Gray to its 401(k) plan of
$4,500, term life insurance premiums of $1,794 (Gray) and long-term disability insurance
premium payments of $1,822 (Gray).(16)
    
    Mr. Meikle joined TCM in April 2006. As of June 2006, TCM paid Mr. Meikle at an
annual rate of $225,000.(17)
    
    The stock options were granted to Mr. Meikle in 2006 by TCM.(18)
    
    For the six months ended June 30, 2006, the reported amount included $68,141 for
relocation expenses.(19)
    
    Mr. Cornwell joined TCM in April 2006. As of June 2006, TCM paid Mr. Cornwell at an
annual rate of $187,500.(20)
    
    The stock options in 2006 were granted to Mr. Cornwell by TCM.(21)
    
    For the six months ended June 30, 2006, the reported amount included $99,495 for
relocation expenses.(22)
    
    Until December 30, 2005, Mr. Logan was employed by Bull Run. Since December 30,
2005, Mr. Logan has been employed by TCM. As of June 30, 2006, TCM paid Mr. Logan at an
annual rate of $205,615.(23)
    
    Mr. Logan joined Bull Run in September of 2004. During 2005 and 2004, Bull Run paid
Mr. Logans salary of $257,258 and $57,593, respectively.(24)
    
    The stock options in 2006 were granted to Mr. Logan by TCM.
 87




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##### Table of Contents



(25)
    
    For the six months ended June 30, 2006, reported amount included $4,496 of matching
contributions by TCM to its 401(k) program.(26)
    
    Mr. Ericksons employment ended with us effective June 1, 2006.(27)
    
    For the six months ended June 30, 2006, the amount reported includes $3,461 of
matching contributions by TCM to its 401K program. For 2004 and 2003, the amount reported
consists of contributions by Bull Run Corporation to a defined contribution retirement plan.
Mr. Erickson will continue to receive severance in the form of his continued salary at the
annual rate of $250,000 until September 30, 2006.
 Stock Options
  Aggregated Options Values at June 30, 2006
 Number of Securities
    
    Value of UnexercisedUnderlying Unexercised
    
    In-The-MoneyName
    
    Options at 6/20/06
    

Options
at 6/30/06($)Exercisable
    
    Unexercisable
    
    Exercisable
    
    UnexercisableRobert S. Prather, Jr.
    
    
    2,179
    
    
    
    
    
    
    
    
    
    
    
    324,000Thomas J. Stultz
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    324,000Michael Steven Cornwell
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    64,800Mark G. Meikle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,000
 1.
    
    Value is based on the closing price of the Common Stock of $8.67 at June 30,
2006, less exercise price.
  Compensation of Directors
  Stock Based Incentives
  88




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##### Table of Contents



Option Grants for the Six Months Ended June 30, 2006
 Potential RealizableIndividual Grants
    
    Value at AssumedAnnual Rates ofNumber of
    
    % Of Total
    
    
    
    Stock PriceSecurities
    
    Options
    
    
    
    Appreciation forUnderlying
    
    Granted To
    
    Exercise or
    
    
    
    Option Term(1)Options
    
    Employees in
    
    Base Price
    
    ExpirationName
    
    Granted
    
    2006
    
    ($/Share)
    
    Date
    
    5% ($)
    
    10% ($)Mr. Prather
    
    
    100,000
    
    
    
    26.7
    
    
    
    5.43
    
    
    4/27/2016
    
    884,490
    
    1,408,402Mr. Stultz
    
    
    100,000
    
    
    
    26.7
    
    
    
    5.43
    
    
    4/27/2016
    
    884,490
    
    1,408,402Mr. Cornwell
    
    
    20,000
    
    
    
    5.3
    
    
    
    5.43
    
    
    4/27/2016
    
    176,898
    
    281,680Mr. Meikle
    
    
    25,000
    
    
    
    6.7
    
    
    
    5.43
    
    
    4/27/2016
    
    221,122
    
    352,101
 1.
    
    Amounts reported in these columns represent amounts that may be realized upon
exercise of options immediately prior to the expiration of their term assuming the
specified compounded rates of appreciation (5% and 10%) on the Common Stock over the
term of the options. These numbers are calculated based on rules promulgated by the
SEC and do not reflect TCMs estimate of future stock price growth. Actual gains, if
any, on stock option exercises and the Common Stock holdings will be dependent on the
timing of such exercise and the future performance of the Common Stock. There can be
no assurance that the rates of appreciation assumed in this table can be achieved or
that the amounts reflected would be received by the options holder.
 
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
  89




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##### Table of Contents



Amount andNature of
    
    PercentName
    
    Beneficial Ownership
    
    of ClassHilton H. Howell, Jr.
    
    
    121,616
    (1)
    
    
    2.3
    %Robert S. Prather, Jr.
    
    
    44,115
    (2)
    
    
    *James W. Busby
    
    
    11,046
    (3)
    
    
    *Thomas J. Stultz
    
    
    5,950
    
    
    
    *Monte C. Johnson
    
    
    5,803
    (4)
    
    
    *Gerald N. Agranoff
    
    
    5,170
    (5)
    
    
    *George E. Nicholson
    
    
    5,000
    
    
    
    *All directors and executive officers as a group
    
    
    198,700
    (6)
    
    
    3.8
    %J. Mack Robinson
    
    
    531,398
    (7)
    
    
    10.2
    %Harriett J. Robinson
    
    
    530,844
    (8)
    
    
    10.2
    %GAMCO Investors, Inc.
    
    
    608,486
    (9)
    
    
    11.7
    %* Less than 1%
 (1)
    
    Includes (a) 50 shares held by Mr. Howells spouse as custodian for his minor child;
(b) 5,857 shares held by Mr. Howells spouse; (c) 8,976 shares owned by Delta Fire &
Casualty Insurance Co.; (d) 20,537 shares owned by Delta Life Insurance Co.; (e) 24,376
shares owned by Bankers Fidelity Life Insurance Co.; (f) 15,607 shares owned by Georgia
Casualty & Surety Co.; (g) 9,700 shares owned by Associated Casualty Insurance Co.; and
(h) 5,000 shares owned by American Southern Insurance Co. Mr. Howell is an executive
officer and director of each of Delta Fire, Delta Life, Bankers Fidelity, Georgia
Casualty, Associated Casualty and American Southern. Mr. Howell is
married to Robin R. Howell, Mr. Robinsons daughter and a beneficiary of the Robin M.
Robinson Trust.(2)
    
    Includes options issued to Mr. Prather to purchase 2,179 shares of our common stock
and 42 shares held by Mr. Prathers spouse.(3)
    
    Includes options issued to Mr. Busby to purchase 84 shares of our common stock; and
an aggregate of 20 shares owned by Mr. Busbys two children.(4)
    
    Includes options issued to Mr. Johnson to purchase 198 shares of our common stock.(5)
    
    Includes options issued to Mr. Agranoff to purchase 98 shares of our common stock.(6)
    
    Includes options issued to all directors and executive officers as a group to
purchase an aggregate 2,559 shares of our common stock. The address for all of our
directors and executive officers is c/o Triple Crown Media, Inc., 546 East Main Street,
Lexington, KY 40508.(7)
    
    Includes (a) 70,818 shares held by Mr. Robinsons spouse; (b) 8,976 shares owned by
Delta Fire & Casualty Insurance Co.; (c) 20,537 shares owned by Delta Life Insurance Co.;
(d) 24,376 shares owned by Bankers Fidelity Life Insurance Co.; (e) 15,607 shares owned by
Georgia Casualty & Surety Co.; (f) 9,400 shares owned by Associated Casualty Insurance
Co.; (g) 5,000 shares owned by American Southern Insurance Co.; (h) 31,108 shares owned by
Gulf Capital Services, Ltd.; (i) 554 shares owned by JMR Foundation; and (j) 113,636
shares held by Mr. Robinsons spouse as trustee under trusts for their children. Mr.
Robinson is an executive officer, director, principal or sole shareholder of each of Delta
Fire, Delta Life, Bankers Fidelity, Georgia Casualty, Associated Casualty, American
Southern and Gulf Capital. Mr. Robinsons address is 4370 Peachtree Road, N.E., Atlanta,
Georgia 30319.(8)
    
    Includes (a) 231,396 shares held by Mrs. Robinsons spouse; (b) 8,976 shares owned by
Delta Fire & Casualty Insurance Co.; (c) 20,537 shares owned by Delta Life Insurance Co.;
(d) 24,376 shares owned by Bankers Fidelity Life Insurance Co.; (e) 15,607 shares owned by
Georgia Casualty & Surety Co.; (f) 9,400 shares owned by Associated Casualty Insurance
Co.; (g) 5,000 shares owned by American Southern Insurance Co.; (h) 31,108 shares owned by
Gulf Capital Services, Ltd.; and (i) 113,636
shares held by Mr. Robinsons spouse as
trustee under trusts for their children. Mrs. Robinsons address is 4370 Peachtree Road,
N.E., Atlanta, Georgia 30319.
 90




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##### Table of Contents



(9)
    
    Based upon a Schedule 13D filed with the SEC on May 8, 2006 by GAMCO Investors, Inc.
Includes (a) 387,809 shares of our common stock held by GAMCO Asset Management; (b)
191,280 shares held by Gabelli Funds, LLC; (c) 15,617 shares held by Gabelli Securities,
Inc.; (d) 11,280 shares held by MJG Associates, Inc.; and (e) 2,500 shares held by Gabelli
Advisers, Inc. The address for GAMCO Investors, Inc. is One Corporate Center, Rye, New
York 10580.
 Equity Plan Compensation Information
 As of June 30, 2006
    
    (a)
    
    (b)
    
    (c)Number of securities
    
    Weighted-average
    
    Number of securities remainingto be issued upon exercise
    
    exercise price of
    
    available for future issuance underof outstanding options,
    
    outstanding options,
    
    equity compensation plans (excludingPlan Category
    
    warrants and rights
    
    warrants and rights
    
    securities reflected in column (a))Equity compensation plans
approved by security holders
    
    
    414,710
    
    
    $
    12.70
    
    
    
    591,000
 
 Item 13. Certain Relationships and Related Transactions
  Insurance Contract with Georgia Casualty & Surety Co. 
 Rights-Sharing Agreement with Gray 
 91




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##### Table of Contents



Item 14. Principal Accountant Fees and Services
  Previous Independent Registered Public Accounting Firm
      New Independent Registered Public Accounting Firm
  
    
    the application of accounting principles to a specified transaction, either completed
or proposed;
 
    
    the type of audit opinion that might be rendered on TCMs financial statements, and in
no case was a written report provided to TCM nor was oral advice provided that TCM
concluded was an important factor in reaching a decision as to accounting, auditing or
financial reporting issues; or
 
    
    any matter that was either the subject of a disagreement, as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of
Regulation S-K, or a reportable event, as that term is defined in Item 304(a)(1)(v) of
Regulation S-K.
 92




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##### Table of Contents



Fees
   2006
    
    
    2005Audit fees (1)
    
    $
    373,150
    
    
    $
    902,321Audit related fees
    
    
    
    
    
    
    Tax fees
    
    
    
    
    
    
    All other fees
    
    
    
    
    
    
    Total
    
    $
    373,150
    
    
    $
    902,321
 1.
    
    For professional services in connection with the audits of
our annual combined financial statements included in our
registration statement on Form S-1/Form S-4 and report on
audits and review of the combined and consolidated financial
statements included in our annual report on Form 10-K for the
year ended December 31, 2005 and our quarterly report on Form
10-Q for the quarter ended March 31, 2006. Since audits of
our financial statements for the years ended December 31,
2004 and 2003 were conducted in 2005 in conjunction with the
Spin-off transaction, no audit fees were incurred
specifically related to TCM in 2004.
  93




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
 (a)
    
    List of documents filed as part of this report:
 (1)
    
    Financial Statements:The following combined and consolidated financial statements of the Company and
Report of Independent Registered Public Accounting Firm are included in Item 8:
        (2)
    
    Financial statement schedule of Triple Crown Media, Inc. required to be filed
by Item 8 of this Form and by Item 15(c):All schedules for which provision is made in the applicable accounting regulations
of the Securities and Exchange Commission are not required under the related
instructions or are inapplicable and therefore have been omitted.
 94




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##### Table of Contents



(3)
    
    Exhibits
 ExhibitNumber
    
    Number Description(10.16)
    
    Amendment to First Lien Senior Secured Credit Agreement(10.17)
    
    Amendment to Second Lien Senior Secured Credit Agreement(21)
    
    List of Subsidiaries of Registrant(23)
    
    Consent of BDO Seidman, LLP(31.1)
    
    Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(31.2)
    
    Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(32.1)
    
    Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(32.2)
    
    Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 (c)
    
    Financial Statement SchedulesThe response to this section is submitted as part of Item 15(a)(1) and Item 15(a)(2).
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##### Table of Contents



SIGNATURES
  TRIPLE CROWN MEDIA, INC.by:
    
    /s/ THOMAS J. STULTZThomas J. StultzPresident and Chief Executive Officer
  Signature
    
    Title
    
    Date/s/ THOMAS J. STULTZ
    
    President, Chief Executive Officer and
Director
    
    September 28, 2006Thomas J. Stultz
    
    (Principal Executive
Officer)/s/ GERALD N. AGRANOFF
    
    Director
    
    September 28, 2006Gerald N. Agranoff/s/ JAMES W. BUSBY
    
    Director
    
    September 28, 2006James W. Busby/s/ HILTON H. HOWELL, JR.
    
    Director
    
    September 28, 2006Hilton H. Howell, Jr./s/ MONTE C. JOHNSON
    
    Director
    
    September 28, 2006Monte C. Johnson/s/ GEORGE E. NICHOLSON
    
    Director
    
    September 28, 2006George E. Nicholson/s/ MARK G. MEIKLE
    
    Executive Vice President and
Chief Financial Officer
    
    September 28, 2006(Principal Accounting
and Financial Officer)/s/ ROBERT S. PRATHER, JR.
    
    Chairman of the Board
    
    September 28, 2006Robert S. Prather, Jr.
 96